Research

Abstract: We explain how a firm’s relational strategies impact conflict risk in the broader network of societal relations. To make this contribution, we highlight how managerial decisions are evaluated, and acted on, not only by the firm’s stakeholders, but also by others attentive to their group’s access to, and control over, economic, political, and social assets in comparison to other groups with whom they are in conflict. We show that when firm actions that form or break ties in its stakeholder network inhibit the ability of groups to reach mutually acceptable settlements on the relative distribution of the costs and benefits from firm operations, conflict risk in the broader societal network increases. We thereby emphasize that managerial decisions in the normal course of business can impact conflict risk, even if unintentionally, by changing the structure of relationships between groups in conflict-affected areas. 

Abstract: Many of society’s grand challenges strongly implicate an “us” and a “them”—not only through the differential impact of issues such as violence, inequality, globalization, climate change, and immigration on different social groups, but also through society’s decreasing capacity to build sufficient consensus for practical progress on these issues across racial, ethnic, economic, geographic, and other demographic divides. Managers may treat their engagement on such broader societal issues as a matter of choice, whether motivated by a sense of obligation or by more pragmatic considerations as reputation- or regulation-sensitive businesses. We argue rather that businesses inevitably have an impact on societal challenges in divided societies—whether positively or negatively, intentionally or not—through the dual mechanisms of rents and relationships. Particularly at the local level, firms may have important direct impacts on the unequal distribution of the benefits, costs, and risks of firm activities to different groups, and thus on conflict risk. Firms, through their relational strategies, also shape the willingness and ability of different groups to work together for positive change both locally and at the broader societal level. Thus, firm behaviors emerging from their daily operations have a discernable effect on society’s capacity to address its grand challenges, necessitating corporate activism that encompasses market and non-market strategies, as well as an understanding of the strategy-setting process itself.