Business & Society

Although researchers have begun to examine how firms manage their entire web of stakeholder relationships, the component relationships also require theoretical and empirical examination. Several studies have found that Employee Stock Ownership Plans (ESOPs) have a positive impact on firm performance. The authors explain these results by hypothesizing that ESOPs, when combined with employee participation programs, forge a stakeholder relationship between management and employees. The authors offer criteria for identifying stakeholder relationships, provide background on ESOPs, analyze why they contribute to establishing such a relationship, and examine how published empirical research supports this analysis. The authors conclude by suggesting directions for future research.

Although social contracts theory has been applied to organizations (Donaldson & Dunfee, 1994), rarely has the theory been tested empirically. This article uses the traditions of communitarianism and individualism to instantiate an ideal-type economic social contract. We asked 269 subjects to complete the Ideological Orientation Scale and to make judgments on eight downsizing scenarios. Using social judgment theory, we assess the direct and indirect influences of ideology on judgments of fairness. Our findings suggest that ideology indeed shapes individual’s conceptions of organizational fairness.

A primary issue in the field of business and society over the past 25 years has been the relationship between corporate social performance and corporate financial performance. Recently, Griffin and Mahon (1997) presented a table categorizing studies that have investigated this relationship. Motivated by concerns with this table, as well as a desire to account for progress in research in this area, the authors reconstructed it. The authors present a portrait of this relationship that is (a) substantially different from that shown in the Griffin and Mahon table and (b) more consistent with the latest research on the topic.

This is a reply to the Research Note by Roman, Hayibor, and Agle in this issue. In this reply, the authors offer some constructive criticism of their analysis in an attempt to continue and further the debate on the relationship between corporate financial and social performance.