Considering the strategic benefits of stakeholder management in a cross cultural and geopolitical context

Donaldson and Preston (1995) have argued that stakeholder literatures explicitly or
implicitly contain theory of three different types – normative, descriptive/empirical,
and instrumental. Among these three types, instrumental theory has the highest
potential to contribute to strategic management because it purports to describe what will
happen if managers or firms behave in certain ways and could potentially explain the
research findings on how corporate social performance affects corporate financial
performance. Having developed the first theoretically sound and empirically testable theory
of this type, Jones (1995) claims to have successfully explained why corporate morality
pays. The importance of the theory needs very little elaboration. It has formed the basis for
Jones’ and his colleagues’ subsequent empirical work (Berman et al., 1999) and theoretical
expansion (Jones et al., 2007). The original work (Jones, 1995) has remained influential and
has been widely cited in literature of corporate social responsibility (CSR) over the last
decade (Marom, 2006; Orlitzky et al., 2003; Heugens and Van Oosterhout, 2002; Mitchell
et al., 1997). This paper takes an unprecedented approach to the theory by exploring its
strategic implication in emerging economies, where the most current and challenging
debates on corporate morality are taking place.