Humanizing Stakeholders by Rethinking Business

Abstract

Can business humanize its stakeholders? And if so, how does this relate to moral consideration for stakeholders? In this paper we compare two business orientations that are relevant for current business theory and practice: a stakeholder orientation and a profit orientation. We empirically investigate the causal relationships between business orientation, humanization, and moral consideration. We report the results of six experiments, making use of different operationalizations of a stakeholder and profit orientation, different stakeholders (employees, suppliers, labor unions), and different participant samples. Our findings support the prediction that individual stakeholders observing a stakeholder-oriented firm see the firm’s other stakeholders as more human than individual stakeholders observing a profit-oriented firm. This humanization, in turn, increases individual stakeholders’ moral consideration for the firm’s other stakeholders. Our findings underscore the importance of humanization for stakeholders’ moral consideration for each other. This paper contributes to a deeper understanding of the firm as a moral community of stakeholders. Specifically, we move away from a focus on managers, and how they can make business more moral. Instead we direct attention to (other) stakeholders, and how business can make these stakeholders more moral.