How Important Are Stakeholder Relationships?

The importance of organizational-stakeholder relationships has and continues to be of interest in the organizational studies literature. The relevance of this topic is even greater given the recent governance failures involving Enron, Tyco, and WorldCom. Indeed, an excessive emphasis on stockholders is blamed for the neglect of other legitimate stakeholder groups. We should acknowledge that the central focus of studying any organizational relationship is the establishment, development, and maintenance of relationships between exchange partners (Morgan & Hunt, 1994). This study investigates the determinants of stakeholder relationship importance and the role it plays in determining whether relationships will continue. For managers, these results suggest that an organization’s ability to develop and maintain strong relationships with their salient stakeholder groups improves the chance that relationships will continue.