STRATEGIC COGNITION AND ISSUE SALIENCE: … · STRATEGIC COGNITION AND ISSUE SALIENCE: TOWARD AN...

STRATEGIC COGNITION AND ISSUESALIENCE: TOWARD AN EXPLANATION OF

FIRM RESPONSIVENESS TOSTAKEHOLDER CONCERNS

JONATHAN BUNDYCHRISTINE SHROPSHIRE

University of Georgia

ANN K. BUCHHOLTZRutgers University

As a new perspective for understanding firm responsiveness to stakeholder concerns,we propose a strategic cognition view of issue salience—that is, the degree to whicha stakeholder issue resonates with and is prioritized by management. Specifically, weexplain how a firm’s cognitive structures of organizational identity and strategicframes use different core logics to influence managerial interpretation of an issue assalient. We then present a typology of firm responsiveness and suggest that firms willrespond more substantially to those issues perceived as salient to both cognitivelogics and more symbolically to those issues perceived as salient to only one logic.This article fills key gaps in our understanding of how firms manage and respond tostakeholders by focusing on the salience of the issue and incorporating strategiccognition as a key mediating mechanism.

Firm responsiveness, which we define as thedegree to which a firm is willing to provide athoughtful response to stakeholder concernsand commit to continued work on the issue (Da-vid, Bloom, & Hillman, 2007; IRRC, 1993), haslong held the interest of organizational scholars.Early work in stakeholder theory addressed firmresponsiveness by developing general strate-gies of stakeholder management (Freeman,1984), outlining broad firm responsibilities tostakeholders (Carroll, 1979), and examiningstakeholder characteristics to determine whichstakeholders should command managerial at-tention (Mitchell, Agle, & Wood, 1997). Buildingon these models and typologies, scholars havebegun to highlight the heterogeneous nature ofstakeholder concerns and idiosyncratic interac-tions between stakeholders and target firms (deBakker & den Hond, 2008). Indeed, the concept ofstakeholder multiplicity or “the degree of multi-

ple, conflicting, complementary, or cooperativestakeholder claims made to an organization”has begun to take root (Neville & Menguc, 2006:377). Researchers are now paying more attentionto the diversity of stakeholder issues—that is,the explicit concerns and requests raised by in-dividuals/groups that can affect or be affectedby the firm (Freeman, 1984)—and the process bywhich managers interpret, balance, and re-spond to these claims (e.g., Eesley & Lenox, 2006;Mitchell, Agle, Chrisman, & Spence, 2011; Row-ley, 1997).

Much extant research on why or how firmsrespond to stakeholder issues approaches thequestion from the stakeholder’s perspective orfocuses on external drivers such as environmen-tal and stakeholder characteristics (e.g., Davidet al., 2007; Eesley & Lenox, 2006; Reid & Toffel,2009). For example, in one stream of researchscholars examine stakeholder characteristics byasking which stakeholder groups receive man-agerial attention (Agle, Mitchell, & Sonnenfeld,1999; David et al., 2007; Mitchell et al., 1997). Inother work researchers examine the influence ofinstitutional, competitive, and individual moti-vators (Bansal & Roth, 2000) or network influ-ences (Reid & Toffel, 2009; Rowley, 1997). How-

We thank former associate editor Jean-Philippe Bonardiand three anonymous reviewers for their invaluable feed-back and guidance. Additionally, we are grateful to AmyHillman, Jeanne Logsdon, Michael Pfarrer, and participantsat the 2011 Academy of Management annual meeting forcomments on earlier versions of the manuscript.

� Academy of Management Review2013, Vol. 38, No. 3, 352–376.http://dx.doi.org/10.5465/amr.2011.0179

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ever, despite this body of work, considerabledebate persists regarding the mechanisms thatdrive firm actions in response to stakeholderconcerns (cf. Laplume, Sonpar, & Litz, 2008).Moreover, there have been few attempts to ex-amine the cognitive process used by managersand decision makers to interpret, understand,and react to the actual issue under consideration.

We suggest a new perspective for understand-ing firm responsiveness to stakeholder concernsby developing a strategic cognition view of is-sue salience, which we define as the degree towhich a stakeholder issue resonates with and isprioritized by management. In doing so we po-sition issue salience as a central driver of firmresponsiveness. Firms and managers do not re-spond to stakeholder and environmental char-acteristics per se. Instead, they respond to spe-cific issues and concerns advocated bystakeholders—for example, emissions reductionadvocated by environmental stakeholders, gov-ernance reform advocated by shareholders, andfair labor practices advocated by employees. Indeveloping our perspective, we recognize thewealth of prior research on firm responsivenessthat emphasizes various issue characteristics—for example, who sponsors the issue (e.g., Agleet al., 1999; Mitchell et al., 1997), how much insti-tutional attention the issue receives (e.g., Bon-ardi & Keim, 2005; Reid & Toffel, 2009), and theissue’s potential impact on the organization andstakeholders (e.g., Jones, 1991). However, we alsosuggest that an important yet missing compo-nent for understanding responsiveness is man-agers’ interpretation of the issue and its charac-teristics as salient to the firm and, thus, worthyof a response. We describe a strategic cognitionprocess (cf. Narayanan, Zane, & Kemmerer, 2011)used by managers to determine issue salienceas an outcome of issue interpretation. Further-more, given that firm responsiveness haslargely been understood as action taken againstsome specific request or demand (e.g., David etal., 2007; Eesley & Lenox, 2006), we use this stra-tegic cognition process to suggest a direct rela-tionship between issue salience and a firm’sresponse.

Our central purpose is to present an issuesalience perspective for examining firm respon-siveness to stakeholder issues. In developingthis perspective, we make two primary contribu-tions. First, we position the strategic cognitionstructures of organizational identity (Albert &

Whetten, 1985; Dutton & Dukerich, 1991) and stra-tegic frames (Huff, 1982) as integral and interre-lated components of the issue interpretationprocess. Organizational identity guides issueinterpretation using an expressive logic, whichis related to how the firm defines and displaysconceptions of the self, while a firm’s strategicframe facilitates issue interpretation using aninstrumental logic, which is predicated on therational pursuit of organizational goals (Polletta& Jasper, 2001; Rowley & Moldoveanu, 2003). Bothcognitive structures work simultaneously to in-fluence issue interpretation. Managers interpreta stakeholder issue as salient based on its rela-tionship to the logic of each cognitive structure.Issues perceived as consistent (i.e., materiallysupporting, reinforcing, or confirming) or con-flicting (i.e., materially challenging or threaten-ing) with the core logic of each structure willhave higher salience, whereas issues perceivedas unrelated (i.e., immaterial to cognitive struc-tures) will have lower salience.

Second, we use the overall level of issue sa-lience and nature of an issue’s cognitive inter-pretation (i.e., whether the issue is perceived asconsistent or conflicting) to develop a typologyof stakeholder issues. We then use these issuetypes to discuss a firm’s expected response. Indoing so we consider the materiality of the re-sponse, either symbolic or substantive, as wellas the general form of the response, either de-fensive or accommodative. We also explore theconsequences of cognitive dissonance (Fest-inger, 1957) or instances when an issue is inter-preted as consistent with one logic but conflict-ing with the other.

In pursuing these objectives, we contribute tothe literature by developing a strategic cogni-tion perspective to understand how managersprocess and respond to the ever-expandingrange of issues championed by stakeholders(Laplume et al., 2008). Our theory develops themediating process between issue characteris-tics as inputs and firm responsiveness as out-put, using an organizational perspective of stra-tegic cognition and issue salience. We considerthe influence of both expressive and instrumen-tal logics in shaping managerial interpretationof stakeholder issues, answering a call for re-search to investigate the dynamic relationshipof the two logics (Rowley & Moldoveanu, 2003)and also connect interpretation to firm action inthe form of responsiveness. Thus, our framework

2013 353Bundy, Shropshire, and Buchholtz

provides a more complete understanding of towhom and what firms pay attention (e.g., Oca-sio, 1997), as well as how they respond given alevel of attention.

Consider an example of environmental sus-tainability as a stakeholder issue for Walmart.Although Walmart was an exemplar in drivingdown prices by taking advantage of economiesof scale, the company was long criticized for itslack of attention to environmental concerns.Eventually, however, executives at Walmart rec-ognized that their economies of scale could pro-vide a strategic advantage in the area of sus-tainability. “At Wal-Mart, we realized, we’velearned, that what many people criticize us foralso happens to be one of our greatest opportu-nities, which is our size,” said Rand Waddoups,senior director of strategy and sustainability(quoted in Truini, 2008: 12). In October 2005Walmart announced broad sustainability initia-tives because such investments would

help Wal-Mart differentiate itself from its compe-tition, maintain a license to grow, and make itssupply chain dramatically more efficient. In otherwords, a good business sustainability planwould help Wal-Mart get even better at what itdoes best: drive down costs to generate profits(Plambeck & Denend, 2008: 54).

Characteristics of the environmental issuealone did not trigger Walmart’s heightened re-sponsiveness to sustainability concerns, largelybecause the nature of the issue did not change—nor did the power, legitimacy, or urgency of thestakeholders involved (Mitchell et al., 1997). In-stead, Walmart executives began to cognitivelyinterpret the issue as materially consistent withits identity as a low-cost leader and with itsstrategic frame of leveraging economies ofscale. We draw on the strategic cognition liter-ature to explain how managers use organiza-tional cognitive structures of identity and stra-tegic frames to process and prioritize the wealthof stakeholder issues faced by firms such asWalmart.

We organize the article as follows. First, webriefly review the issue salience literature tohighlight the previous use of expressive andinstrumental logics to understand stakeholderissues. We then formally define and present astrategic cognition framework of issue salience.In doing so we discuss how different character-istics of the issue influence perceptions of sa-lience. In the second half of the article, we de-

scribe how issue salience leads to firm actionand responsiveness, and we present a typologyof stakeholder issues and firm responses. Weend with a discussion of the implications of ourtheoretical model and an agenda for futureresearch.

STAKEHOLDER ISSUE SALIENCE

Research investigating the concept of issuesalience appears in several streams of organi-zational literature, emphasizing both stake-holder and firm perspectives. Scholars taking astakeholder perspective regularly focus on thedegree to which an issue resonates with a stake-holder group, suggesting that stakeholders mo-bilize around an issue because of their collec-tive perception of its criticality as driven byidentity (Rowley & Moldoveanu, 2003), culture(Jones, Felps, & Bigley, 2007), or emotional con-nection to it (Bansal & Roth, 2000). This socialidentity and emotional perspective can explainwhy certain stakeholders advocate for radicalissues or lost causes, such as when “gadfly”shareholders propose extreme resolutions (Row-ley & Moldoveanu, 2003). Issues are salient tostakeholder groups to the degree that they con-nect with deeper meanings of what defines thegroup and makes it unique. Research on collec-tive identity in social movements refers to thischaracteristic of identity as an expressive logic,suggesting that actions motivated by identityserve to express identity to external constituentsand stakeholders (Polletta & Jasper, 2001). Forexample, Scott and Lane used expressive logicto argue that “identity is best understood ascontested and negotiated through iterative in-teractions between managers and stakehold-ers” (2000: 44). As such, an organization’s desireto articulate its identity to pertinent stakehold-ers can influence the expressive salience of ex-ternal issues (Ashforth, Harrison, & Corley, 2008).

While stakeholder views of issue salience em-phasize expressive logic from an identity per-spective, strategic views of issue salience focuson firm-level interpretations of how an issuepotentially affects the firm as it attempts toachieve its goals (Dutton & Jackson, 1987; Jack-son & Dutton, 1988; Thomas, Clark, & Gioia,1993). For example, strategic issues manage-ment researchers investigate the extent towhich an issue “is likely to have an importantimpact on the ability of the enterprise to meet its

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objectives” (Ansoff, 1980: 133). Thus, issue sa-lience perceptions are a function of how the firmstrategically frames the issue. Managers priori-tize issues based on perceptions of how the is-sue relates to strategic decisions and goals, andmanagerial action follows this prioritization. Animportant conclusion of this research is that is-sues not framed as influential to strategic goalsdo not receive priority or attention (Ansoff, 1980).Thus, in contrast to the expressive logic of orga-nizational identity, strategic frames are drivenby an instrumental logic concerned with the ra-tional pursuit of organizational objectives (Pol-letta & Jasper, 2001). If managers interpret anissue as instrumentally salient for achievingstrategic goals, they grant it greater priority andattention.

Drawing from both perspectives outlinedabove, we formally define issue salience as thedegree to which a stakeholder issue resonateswith and is prioritized by management. Implicitin our definition is a characterization of issuesalience as a perceptual outcome of a strategiccognition process. We suggest that the expres-sive and instrumental cognitive structures of or-ganizational identity and strategic frames, re-spectively, drive this perception. The salience ofan issue is a function of its perceived relation-

ship with the interpretive logic of each cognitivestructure (Ashforth & Mael, 1996). Building on thestakeholder literature highlighted above, wepropose that an issue is consistent with an or-ganization’s expressive logic if it is perceived ashaving bearing on or being material to the ex-pression of an organization’s core values andbeliefs. Similarly, drawing from research onstrategic issues management, we propose thatan issue is consistent with an organization’sinstrumental logic if it is perceived as materi-ally supporting or useful for the achievement ofstrategic goals. In contrast, an issue is conflict-ing with each respective structure when it isinterpreted as materially challenging or threat-ening an organization’s identity or strategicframe. Finally, an issue may also be perceivedas unrelated to an organization’s expressive orinstrumental logic. In such cases the issue islargely seen as irrelevant to the achievement ofan organization’s goals or the expression of itsidentity.

Our overarching framework of issue salienceappears in Figure 1. Those issues perceived asmaterially related to both cognitive logics—either consistent or conflicting—will be highlysalient to managers (as identified in the darkshaded section of Figure 1). Issues perceived as

FIGURE 1A Strategic Cognition Framework for Issue Salience

Relationship with strategic frame

Consistent Conflicting Unrelated

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p w

ith

orga

niza

tion

al id

enti

ty

Con

sist

ent

Con

flic

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Unr

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Low salience

High salience—

expressive and instrumental salience

Moderate salience—

expressive salience

only

Moderate salience—

instrumental salience only


materially related to only one logic—either con-sistent or conflicting—will be moderately sa-lient (as identified in the light shaded sectionsof Figure 1). Finally, issues perceived as unre-lated to both cognitive logics will have low sa-lience (as identified in the lower right section ofFigure 1).

Several important aspects of our frameworkshould be noted. First, consistent with prior re-search, we consider each cognitive structure tobe independent of the other while operating si-multaneously to influence interpretation and sa-lience (Ashforth & Mael, 1996). We discuss thenature of each structure and their interrelation-ship in the following section. Second, our con-ceptualization of salience distinguishes issueinterpretation in both positive and negativeterms—as consistent or conflicting. Researchersin strategic issues management often highlightissues as both opportunities and threats (e.g.,Dutton & Jackson, 1987; Jackson & Dutton, 1988),and research on organizational identity regu-larly considers the role of identity threats inaddition to opportunities to express identity(e.g., Dutton & Dukerich, 1991). Thus, consistentwith prior research in these areas, we allow forboth positively and negatively salient issues.Viewing salience in such terms also allows us toconsider instances of cognitive dissonance—that is, when an issue is perceived as consistentwith one logic but conflicting with the other. Wedetail the implications of cognitive dissonancein our section on firm responsiveness. For thecurrent discussion regarding issue salience, wesuggest that dissonant issues are highly salient,as are consonant issues or those issues uni-formly consistent or conflicting with both logics.

As mentioned above, much of the previouswork exploring firm reactions to stakeholder is-sues focuses on the influence of exogenous is-sue characteristics—for example, how muchpower or legitimacy is held by a sponsoringstakeholder (e.g., Mitchell et al., 1997) or how theissue is embedded in the organizational envi-ronment (e.g., Reid & Toffel, 2009). We build onthis literature by focusing on how firms cogni-tively process these characteristics—how man-agers interpret an issue as meaningful to theorganization’s core logics. Reaction to an issueis not automated but, rather, driven by issueinterpretation and perception (Dutton & Duke-rich, 1991; Dutton & Jackson, 1987; Jackson & Dut-ton, 1988). Our arguments draw from the strate-

gic cognition perspective (Narayanan et al.,2011), which emphasizes the role of cognitivestructures, including strategic frames and orga-nizational identity. We now turn our attention tostrategic cognition and discuss the role of eachcognitive structure in determining issue sa-lience. While we focus on explicating the inter-pretation process, we also recognize previousresearch and highlight potential exogenouscharacteristics of an issue that can influence itsinterpretation.

STRATEGIC COGNITION AND PERCEPTIONSOF ISSUE SALIENCE

Strategic cognition is the study of organiza-tional cognitive structures and decision pro-cesses in an attempt to understand strategicdecision making (Narayanan et al., 2011; Porac &Thomas, 2002). Behavioral biases and interpre-tive frames constrain managers’ ability to makecomplex decisions (Finkelstein, Hambrick, &Cannella, 2009; Kabanoff & Brown, 2008; Walsh,1995). Such biases, in part, determine which in-formation receives managerial attention andhow managers interpret it. Thus, strategic cog-nition describes the information-filtering or sen-semaking process through which strategic is-sues are interpreted (Finkelstein et al., 2009).

Accounting for strategic cognition allows us toenter the black box of managerial decision mak-ing so as to understand how firms act as inter-pretation systems to receive and process stake-holder issues (Daft & Weick, 1984). Strategiccognition is a function of organizational charac-teristics (e.g., age, size), top manager traits (e.g.,functional or educational background), and val-ues (Daft & Weick, 1984; Finkelstein et al., 2009;Hambrick & Mason, 1984). In this way, and con-sistent with prior literature on strategic cogni-tion (e.g., Daft & Weick, 1984; Dutton & Dukerich,1991; Gioia & Thomas, 1996; Pratt & Foreman,2000), we adopt a managerial perspective. Addi-tionally, stakeholder management is typicallyconsidered an enterprise-level strategy (Schen-del & Hofer, 1979). Thus, rather than focusing onindividual agency, our theory resides at the or-ganizational level to understand how strategiccognitive mechanisms influence the processingof stakeholder issues.

Research on strategic cognition often focuseson traditional strategic issues, such as the def-inition of industry and competitive boundaries


(Porac & Thomas, 2002) or the nature of strategicchange (Nadkarni & Narayanan, 2007), althoughsome researchers have also addressed firm-stakeholder interactions (cf. Brickson, 2005; Scott& Lane, 2000). However, the question remains,“How do firms cognitively process stakeholderissues to determine salience and subsequentresponsiveness?” To answer this question wefocus on firm cognitive structures, which repre-sent the relatively stable characteristics and/orrepeated patterns of behavior used to interpretstrategic information (Kabanoff & Brown, 2008;Narayanan et al., 2011). Cognitive structures arethe mechanisms and biases that direct the sense-making process of “information seeking, mean-ing ascription, and action” (Thomas et al., 1993:240). If strategic cognition is the process for sense-making, cognitive structures represent the toolsfor this process.

Firms face numerous and diverse stakeholderconcerns. For an external issue to receive atten-tion and reaction from a firm, it must be inter-preted as somehow related or relevant to thefirm. As mentioned above, research on issue sa-lience has previously focused on the cognitivestructures of organizational identity and its stra-tegic frames, viewing each as a mechanism forprocessing external issue information and guid-ing firm perceptions and decisions (Ashforth &Mael, 1996; Narayanan et al., 2011). Each cogni-tive structure captures unique aspects of issueinterpretation and can act independently to in-fluence the salience of a stakeholder concern.Ashforth and Mael considered the relationshipbetween organizational identity and strategicframes to be “mutually reinforcing, although notdetermining” (1996: 20). Thus, similar to Donald-son and Preston’s (1995) distinction between thecore normative and instrumental aspects ofstakeholder theory, strategic cognition researchdistinguishes between an expressive logic in-herent in organizational identity and an instru-mental logic of strategic frames (Ashforth &Mael, 1996; Narayanan et al., 2011; Polletta &Jasper, 2001). These two distinct logics differen-tiate the influence of each structure on firm at-tention to stakeholder issues.

Identity is often expressed in terms of howorganizations “wish” to be perceived and isused to construct a desirable self (Polletta &Jasper, 2001). Rowley and Moldoveanu dis-cussed this aspect of cognition for stakeholdergroups, suggesting that identity-driven actions

“may not be taken by the group to satisfy themembers’ rational interests but, rather, to affirmthe members’ collective identity” (2003: 211).Thus, issues often become salient because oftheir normative or expressive value, not neces-sarily because of their instrumental value. Theexpressive logic inherent in identity focuses onthe ability of an issue to serve as a claim foridentity construction and is not necessarily con-cerned with the issue’s strategic significance(Albert & Whetten, 1985; Ashforth & Mael, 1996).

Alternatively, while identity is often associ-ated with emotional resonance and intrinsicvalue (Albert et al., 1998; Weick, 1999), strategicframes reflect cause-and-effect beliefs for effec-tive strategic action to achieve organizationalgoals (Chattopadhyay, Glick, Miller, & Huber,1999). Such an instrumental logic is often calcu-lated on the basis of cost-benefit considerations,without explicitly accounting for identity or ex-pressive concerns (Polletta & Jasper, 2001; Row-ley & Moldoveanu, 2003). Therefore, salience andattention may also be granted to an issue be-cause it serves an instrumental purpose, inde-pendent of its relationship to identity.

In summary, identity is related to organiza-tional rhetoric and to the display of desired im-ages, whereas strategic frames are related tocalculative action aimed at achieving perfor-mance outcomes. We further explore each cog-nitive structure below, focusing on how variousstakeholder issue characteristics work to influ-ence managerial perceptions of salience.

Organizational Identity and Issue Salience

The construct of organizational identity re-flects that which is distinctive and enduringabout an organization (Albert & Whetten, 1985)or how an organization views and defines itself.From a sensemaking perspective (Weick, 1979,1995), organizational identity is a critical lensused by organizational members to interpret theworld. Identities reflect collective understand-ing and represent a source of differentiationfrom other firms. Organizational identity is per-ceived as a “root construct” used to situate cog-nitive processing and sensemaking (Albert, Ash-forth, & Dutton, 2000: 13; Ashforth et al., 2008).

We argue that a stakeholder issue perceivedas material to a firm’s core values and beliefs—the primary content of organizational identity—will have expressive salience (Ashforth, 2001;


Ashforth et al., 2008). Multiple stakeholder- andissue-related factors are important when con-sidering how an issue is perceived as expres-sively salient. However, specifying all the exog-enous characteristics of an issue that mayrender it salient is outside the scope of thisarticle. Instead, we distill three broad issue-centric characteristics that may influence man-agerial cognitive processing: characteristics ofthe sponsoring stakeholder, characteristics ofthe actual request or issue under consideration,and characteristics of the institutional or envi-ronmental context (e.g., Mitchell et al., 1997; Reid& Toffel, 2009; Rowley & Berman, 2000).

Regarding the sponsoring stakeholder, man-agers—in understanding and expressing orga-nizational identity—are cognizant of who pres-ents a specific demand or concern. Salientstakeholders’ support of an issue can influenceor reinforce how an organization perceives it-self, especially if those stakeholder groups ortheir espoused issues are central to the organi-zation’s identity. For example, theory on organi-zational identity orientation explains that afirm’s perception of an issue as confirming ordenying its collective identity with stakeholdersgives the issue meaning and priority (Brickson,2005, 2007). Thus, an organizational identitydefined by a relationship with a particularstakeholder will render the concerns of thatstakeholder material to identity and, hence, ex-pressively salient. Consider the case of Johnson& Johnson, whose mission and credo prioritize aresponsibility and commitment to consumers.Any concern raised by this stakeholder group islikely to be perceived as consistent with thefirm’s identity and, thus, to be given consider-ation. Similarly, any issue that threatens John-son & Johnson’s relationship with consumerswould conflict with thus, also command expres-sive salience.

Like identity orientation, the concept of refer-ent others also provides a context for cognitiveprocessing with respect to identity. Referent oth-ers are stakeholders with a particularly stronginfluence on the process of self-definition(Greenwald & Breckler, 1985; Scott & Lane, 2000).Any issue influencing the relationship with areferent stakeholder would likely be perceivedas related to the firm’s expressive logic. Simi-larly, the idea of stakeholder legitimacy oftenindicates a moral or normative obligation to cer-tain stakeholders (Jones et al., 2007; Mitchell et

al., 1997; Phillips, 2003). An identity defined by astakeholder relationship can create normativeobligations to referent stakeholders, and, thus,issues raised by these stakeholders would beseen as important to the core values of anorganization.

Stakeholder issues may also command man-agerial attention not because of the issue’ssponsor but because of the specific issue beingraised. For example, an organizational identitystrongly rooted in conceptions of justice or fair-ness may influence a firm’s managers to givesalience to justice-related requests from stake-holders (e.g., Logsdon & Van Buren, 2008). Justas a stakeholder advocates for an issue basedon a desire to articulate identity (Rowley & Mol-doveanu, 2003), a firm processes stakeholderissues in relation to organizational identity todetermine if they are worthy of attention. Orga-nizations like Patagonia or Herman Miller,whose value statements stress environmentalstewardship and sustainability, are likely toperceive issues related to the environment assalient given the potential to express theiridentity.

The firing of comedian Gilbert Gottfried as thevoice of the Aflac duck illustrates how issuecharacteristics that conflict with a firm’s corevalues and identity can also inspire a high levelof expressive salience. Shortly after the devas-tating 2011 earthquake and tsunami in Japan,Gottfried posted a series of jokes about the di-saster. Comedians often cross boundaries, andcompanies often respond when their spokespeo-ple use material that is publicly offensive. How-ever, the clash of Gottfried’s material withAflac’s core values amplified the issue’s per-ceived salience for Aflac. Aflac espouses a corephilosophy of servant leadership and has beenconsistently ranked on Fortune’s “Most AdmiredCompanies” and Ethisphere Magazine’s“World’s Most Ethical Companies” lists (Grillo,2010; Washington, Sutton, & Field, 2006). Re-sponding with derision instead of concern forthe people of Japan stood in sharp contrast toAflac’s identity. Because the issue was highlysalient to Aflac, the company crafted an imme-diate response, firing Gottfried, removing alltelevision ads, placing newspaper ads offeringcondolences, and contributing generously to therelief effort (Belson, 2011).

Finally, broader institutional and environ-mental aspects of an issue may influence its


expressive salience. An important function oforganizational identity is the expression ofuniqueness; an organization’s identity serves asa tool for differentiation (Ashforth & Mael, 1996;Rowley & Moldoveanu, 2003). Stakeholder issuesthat offer little opportunity for a firm to expressits unique identity will likely be perceived asunrelated to organizational identity. For exam-ple, as an early adopter of a majority-vote stan-dard for director elections, Intel was able to cap-italize on the expressive value in setting itselfapart from competitors as a leader in corporategovernance and accountability (Allen, 2007; In-tel, 2006). Following Intel’s adoption, nearlythree-quarters of the S&P 500 also moved to amajority-vote standard, making the issue farless material to late adopter firms in the expres-sion of a unique identity. Thus, issue timing anddegree of institutionalization can influence theexpressive interpretation of an issue.

In summary, we suggest that organizationalidentity directs managerial attention and pro-motes issue salience. Because identity is pri-marily understood using an expressive logic,issues that are perceived as materially support-ing or challenging a firm’s ability to express itsidentity to stakeholders will have expressivesalience—that is, will resonate with and beprioritized by management. A number of stake-holder-, environmental-, and issue-specificcharacteristics can influence a firm’s perceptionof expressive salience, including the centralityof the sponsoring stakeholder or issue topic tothe firm’s identity or the ability of the issue toconvey a unique identity within environmentalconstraints. Managers interpret stakeholderconcerns in terms of their material relationshipto the expression of organizational identity.Thus, we suggest the following.

Proposition 1: Stakeholder issues per-ceived as either consistent or conflict-ing with a firm’s organizational iden-tity will have expressive salience tomanagers.

Strategic Frames and Issue Salience

While organizational identity reflects how afirm defines itself and expresses its purpose, astrategic frame is the cognitive mechanism fortranslating that purpose into strategic action(Daft & Weick, 1984; Nadkarni & Narayanan,

2007). It is “the knowledge structure that informsstrategic decisions, a cognitive template thatindividuals impose on the information environ-ment to give it form and meaning” (Narayananet al., 2011: 309). In other words, strategic framesshape the interpretation and translation of en-vironmental context into competitive decisions.Strategic frames use an instrumental logic toserve as filters, paths, or reference points, pro-viding a focus on information and actions thatconform to what is necessary for success (Huff,1982). Finkelstein and colleagues (2009) sug-gested that frames influence a filtering processdetermining which information receives atten-tion (i.e., is in the field of vision). For a stake-holder issue to be considered instrumentally sa-lient, it must first fall within the strategic field ofvision and overcome other stimuli. Ashforth andMael explained that “to be labeled a strategicissue, something must be noticed and inter-preted as potentially relevant to the organiza-tion’s status or performance” (1996: 46). Issues notinterpreted as instrumental to the organization’spursuit of objectives receive little attention (Barr,Stimpert, & Huff, 1992; Narayanan et al., 2011).

As with identity, firms use strategic frames tointerpret and understand stakeholder issues(Dutton, Fahey, & Narayanan, 1983; Dutton &Jackson, 1987; Jackson & Dutton, 1988; Thomas etal., 1993). Research on strategic issues manage-ment often invokes the concept of strategic fram-ing to describe classification and responseschemas for issue interpretation. Managers usestrategic frames to categorize an issue and de-termine its level of priority (Ansoff, 1980), yetthese frames are also a product of social con-struction and influence (Porac & Thomas, 2002).Thus, previous work relating issue characteris-tics directly to firm responsiveness provides in-sight into these input factors of cognitive pro-cessing. In other words, and similar toorganizational identity, an issue’s sponsor, con-sequences, and surrounding context all influ-ence managers’ cognitive interpretation ofwhether the issue is materially related to thestrategic frame of the organization.

As mentioned above, managers are aware ofthe sources of the issues they face and maydirect their attention depending on an issue’ssponsor (Dutton, Walton, & Abrahamson, 1989).Researchers have developed a number of stake-holder-based frameworks focusing on the in-strumental relationship between the stake-


holder and the firm. For example, early workstressed the internal or external position of thestakeholder relative to the firm (Freeman, 1984),as well as the stakeholder’s contractual rela-tionship with the firm, often categorized as pri-mary versus secondary (Clarkson, 1995). Theidea of issue networks (Frooman, 2010) alsohighlights the importance of considering theweb of interrelated stakeholders with an inter-est in the issue. Mitchell and colleagues (1997)developed perhaps the most well-known instru-mental framework of stakeholder characteris-tics by focusing on stakeholder salience—thedegree of priority given to different stakeholdergroups based on attributes of the stakeholder.According to their typology, stakeholder sa-lience is a function of the power, urgency, andlegitimacy of the stakeholder group. Several em-pirical examinations lend partial support tomodels of stakeholder salience (Agle et al., 1999;David et al., 2007; Eesley & Lenox, 2006), suggest-ing that managers indeed pay attention to sa-lient stakeholders when making strategic deci-sions. Thus, the characteristics of an issueadvocate can influence a firm’s cognitive pro-cessing using strategic frames.

Managers are also cognizant of the broadercompetitive and institutional environment inwhich stakeholder concerns are embedded. Asinstitutional attention to certain issues rises,firms face increasing pressure to consider theissues in their strategic frame (DiMaggio & Pow-ell, 1983; Scott, 1995). Research on corporate po-litical activity suggests that firms confrontedwith “widely salient” issues find resistance dif-ficult and face increased pressure to conform(Bonardi & Keim, 2005). As firms become awareof peer company responses, they may be morelikely to embrace similar choices (Abrahamson& Rosenkopf, 1997; Haveman, 1993). Whether im-minent government action (King & Lenox, 2000;Reid & Toffel, 2009) or intensified media atten-tion to a specific stakeholder issue (Deephouse,2000; Desai, 2011; Pollock & Rindova, 2003), theinstitutional environment helps establish andvalidate a stakeholder agenda (McCombs, 1981;Rogers, Dearing, & Bregman, 1993), which alsoheightens managerial awareness and mayshape an issue’s instrumental interpretation.

The intensity or nature of stakeholder issuesalso influences instrumental interpretation. De-cisions that have an impact on the firm and onother stakeholders vary in their influence and in

the concomitant level of their issue intensity,which is the “issue related imperative” in thesituation (Jones, 1991: 372), encompassing bothstrategic and moral issue considerations. Forexample, the consequences of product recallscan be moral (Cheah, Chan, & Chieng, 2007)and/or financial (Thirumalai & Sinha, 2011). Inhis issue-contingent construct of moral inten-sity, Jones (1991) considered multiple elementsof an issue, from magnitude of consequencesand social consensus to temporal immediacyand proximity, and explored how these ele-ments influence managerial decision making.Thus, the impact of the issue itself on the orga-nization can also shape perceptions of instru-mental salience.

The aforementioned firing of comedian Gil-bert Gottfried as the voice of the Aflac duck alsoillustrates how an issue can be interpreted froman instrumental perspective using strategicframes. The magnitude of the event, the socialconsensus regarding its harm, and the immedi-acy of the impact combined to create a highlevel of moral intensity. Furthermore, the offend-ing remarks held a high level of proximity sinceAflac has approximately 4,000 employees in Ja-pan and derives more than 70 percent of itsrevenue there (Belson, 2011). The nature of theconcerns and the collective intensity of the issueconflicted with Aflac’s strategic frame, grantingit instrumental salience.

In summary, strategic frames represent an or-ganization’s understanding of cause-effect rela-tionships in the competitive environment basedwithin an instrumental logic. Issues interpretedas related to strategic goals, either as consistentor conflicting, receive consideration and atten-tion. Thus, we suggest that stakeholder issuesperceived through a firm’s strategic frame aspertinent to competitive advantage and perfor-mance will be instrumentally salient, whilethose interpreted as unrelated to the strategicframe will not be salient. Stakeholder- and is-sue-specific characteristics, including salienceof the advocate stakeholder, institutional atten-tion given to the issue, and intensity of issueconsequences, influence perceptions of issuesalience to strategic frames.

Proposition 2: Stakeholder issues per-ceived as either consistent or conflictingwith a firm’s strategic frame will haveinstrumental salience to managers.


Issue Salience to Both Organizational Identityand Strategic Frames

Above we outlined the function of organiza-tional identity and its strategic frames in deter-mining the expressive and instrumental sa-lience of stakeholder issues. Consistent withstrategic cognition research, in which eachstructure is often considered separately (cf.Narayanan et al., 2011), we discussed the influ-ence of each cognitive structure as an indepen-dent element in a firm’s sensemaking process.We suggest, however, that an issue with onlyexpressive or instrumental salience, not both,will result in only a moderate level of total sa-lience. We now describe how an issue garnershigh salience by highlighting the interrelation-ship between the two cognitive structures.

While serving distinct expressive and instru-mental functions, organizational identity andstrategic frames are loosely coupled, recipro-cally related cognitive structures that can rein-force or bias one another (cf. Ashforth & Mael,1996; Dutton & Penner, 1993; Gioia & Thomas,1996; Narayanan et al., 2011; Polletta & Jasper,2001). For example, Ashforth and Mael (1996),building on the work of Dutton and Penner(1993), suggested that strategic frames focus afirm’s attention on expressively salient issuesbased on aspects of instrumental importance,legitimacy, and feasibility. Organizations oftenseek opportunities to express identity across awide range of diverse and unrelated issues, andstrategic frames serve to filter or restrict thisrange by guiding managerial attention to thoseissues with strategic importance for the organi-zation. Similarly, organizational identity canguide strategic frames to focus on issues thathave some relationship with broader organiza-tional values. Ultimately, those issues that“speak to the raisons d’etre and core competen-cies of the organization” will be seen as moreattractive to the organization (Ashforth & Mael,1996: 46) and as more legitimate targets for ac-tion (Dutton & Penner, 1993). Thus, expressiveissues that also carry instrumental importance,or vice versa—instrumental issues that also al-low for identity expression—will be given thehighest priority by managers.

Research on strategic agenda building helpsto illustrate this point (Dutton, 1997; Dutton &Dukerich, 1991; Dutton & Penner, 1993). A strate-gic agenda is the set of issues commanding

managerial attention and reflects managers’limited capacity for the number of issues thatcan be prioritized. Issue- and firm-specific fac-tors may encourage an issue’s placement on afirm’s strategic agenda, including the issue’sperceived instrumental value, (in)consistencywith shared organizational principles, and in-ternal and external norms and expectations(Dutton, 1997). Issues that satisfy more of thesefactors are likely to be more prominent on thestrategic agenda. An example is Dutton andDukerich’s (1991) study of the New York/New Jer-sey Port Authority. Homelessness existed as aninstrumentally salient issue for the Port Author-ity for a number of years. However, the issuedid not achieve priority on the Port Authority’sstrategic agenda until it gained expressive sa-lience via its rise in national attention and so-cial legitimation (Dutton, 1997; Dutton & Duke-rich, 1991). Thus, a perceived conflict with theorganization’s identity was the catalyst neededto raise a moderately salient (i.e., instrumentallysalient only) issue into a highly salient one,having both instrumental and expressivesalience.

Given the reinforcing relationship betweenidentity and frames, we suggest that issue sa-lience is further heightened by an issue’s per-ceived relationship to expressive and instru-mental logics, collectively. An issue that hasbearing on both the expression of organiza-tional identity—thus expressive salience—andon the achievement of strategic goals and objec-tives—thus instrumental salience—will capturethe total attention of managers and enjoy agreater degree of resonance and prioritizationthan an issue relevant to only one cognitivemechanism. Similarly, issues lacking a connec-tion to either identity or strategic frames willevade managerial attention and fail to resonatewith organizational decision makers.

Proposition 3: Stakeholder issues per-ceived as either consistent or conflict-ing with both a firm’s organizationalidentity and its strategic frames willhave high salience to managers.

Proposition 4: Stakeholder issues per-ceived as unrelated to both a firm’sorganizational identity and its strate-gic frames will have low salience tomanagers.


Given this understanding of issue salience, anumber of questions remain regarding the rela-tionship between salience and firm responsive-ness. For example, how do firms respond when astakeholder issue is highly salient and per-ceived as consistent (or conflicting) with bothinterpretive logics? Alternatively, how do firmsrespond when an issue is salient to each logicbut the nature of each relationship is at odds,such as when an issue is perceived as consis-tent with identity but conflicting with strategicframes, or vice versa? How do firms act on amoderately salient issue or on issues perceivedas salient to only one logic? To answer thesequestions, we propose a typology of strategiccognition, issue type, and responsiveness. In do-ing so we describe how total issue salience in-fluences the general substance of the response,ranging from symbolic to substantive, whilethe nature of the interrelationship betweencognitive structures influences the generalform of the response, ranging from defensive toaccommodative.

We depict our typology in Figure 2, whichexpands on the issue salience framework pre-sented in Figure 1. Among highly salient issues,we first explore consonant cognitive interrela-tionships—that is, when an issue is perceived

as uniformly consistent or conflicting with bothcognitive structures. Such issues are depicted inthe top left and bottom right corners of the darkshaded section of Figure 2. Consonant issuesare likely to trigger substantive accommodativeresponses in cases of consonant consistencyand substantive defensive responses in cases ofconsonant conflict. We then attend to situationsof cognitive dissonance—when an issue is per-ceived as consistent with one structure but con-flicting with the other structure. These issuetypes are found in the upper right and bottomleft corners of the dark shaded section of Fig-ure 2. Such issues prompt a unique type of re-sponsiveness in the form of substantive negoti-ation. Next, we address firm responsiveness tomoderately salient issues, or those issues rele-vant to only one cognitive structure, as depictedin the light shaded sections of Figure 2. We endwith issues perceived as immaterial or unre-lated to both cognitive structures, depicted inthe bottom right section of Figure 2.

ISSUE SALIENCE AND RESPONSIVENESS

The propositions above specify the nature andlevel of issue salience by explicating the cogni-tive process underlying managerial interpreta-

FIGURE 2Strategic Cognition, Issue Type, and Responsiveness

Relationship with strategic frame

Consistent Conflicting Unrelated

Rel

atio

nshi

p w

ith

orga

niza

tion

al id

enti

ty

Con

sist

ent

True opportunity— substantive

accommodative

Frame conflict— substantive negotiation

Expressive opportunity—

symbolic accommodative

Con

flic

ting

Identity conflict— substantive negotiation

True threat— substantive defensive

Expressive threat— symbolic defensive

Unr

elat

ed

Instrumental opportunity—

symbolic accommodative

Instrumental threat— symbolic defensive

Nonissue—no response


tion of stakeholder issues. Rather than definingissue salience based on firm actions (e.g., Eesley& Lenox, 2006), we conceive of issue salience asan outcome of cognitive interpretation—a per-ception of expressive importance and/or instru-mental influence. However, perception in and ofitself does not specify action. Instead, the cogni-tive structures and interpretive logics “establishthe parameters of behavior” (Ashforth & Mael,1996: 48). Responsiveness captures the firm’scommitment and course of action following per-ceptions of salience. If issue salience representsthe resonance and priority of an issue once cog-nitively processed, then responsiveness reflectsbehavior based on that issue’s salience.

Within- and between-firm responsiveness tostakeholder issues is often quite mixed. Con-sider an example using one specific stakeholdergroup—firm shareholders. Securities and ex-change laws allow qualified shareholders tosubmit, for proxy consideration, resolutions con-cerning any number of issues, including socialand governance policy issues. During a recentproxy season, the Walt Disney Company re-ceived eight shareholder resolutions, with spon-sors ranging from individual gadfly sharehold-ers to major public pensions, such as CalPERSand the New York City Pension Fund. Theseresolutions addressed a variety of issues, suchas international labor standards, CEO/chairmanduality, and shareholder access to proxy mate-rial. Disney responded to these requests in dra-matically different ways: effectively ignoringsome, embracing others, and outright resistingseveral. Some of the resolutions Disney rejectedenjoyed broad public support and were spon-sored by prominent shareholders. Additionally,other firms facing similar resolutions respondedquite differently, and in many cases those firmsaccepted resolutions Disney rejected, and viceversa. Explaining such variance in firm respon-siveness has long been a goal of stakeholderresearch. While external factors are important,models limited to stakeholder and environmen-tal characteristics offer insufficient explanationfor why some issues receive support while oth-ers provoke fierce battles. Thus, our focus oncognition and salience can advance research onresponsiveness by considering the logics andstructures of stakeholder issue interpretationand the subsequent connection to action inresponse.

We define responsiveness as the degree towhich a firm is willing to provide a thoughtfulresponse and commit to continued work in thearea of stakeholder concern (David et al., 2007;IRRC, 1993). Our definition connotes action butis not limited to a discrete outcome—that is, thatthe firm either does or does not respond. Respon-siveness also does not imply strict adoption orrejection of a stakeholder’s specific requests but,rather, incorporates a range of potential out-comes regarding firm behavior toward thestakeholder issue. Wood (1991) described re-sponsiveness as comprising the social impact,programs, and policies implemented by a com-pany in response to stakeholder issues. Simi-larly, as the “action phase of management,”Carroll (1979: 502) suggested that responsive-ness can vary from doing nothing (i.e., nonre-sponsiveness) to doing much (i.e., substantiveresponsiveness). Thus, we conceive of respon-siveness as an array of choices for action char-acterized by the nature of issue salience.

Consistent with Doty and Glick’s recommen-dations (1994), our typology of responsivenesssuggests specific relationships among issuetypes, based on salience and cognitive conso-nance/dissonance, and a firm’s expected re-sponse, in terms of substance and form. Re-sponse substance is the degree of materialaction taken in reaction to the issue, often re-sulting in significant changes to the firm’s“goals, structures, and processes” (Ashforth &Gibbs, 1990: 178; Ashforth & Mael, 1996; David etal., 2007). Ashforth and colleagues (2008) sug-gested that behaviors are probabilistic out-comes of identity and thus highlight the positiverelationship between identity and substantiveaction. Identities provide trajectories for action;they make action more or less feasible given therelationship with organizational identity. Thesame is true for strategic frames, which serve tofocus managerial attention and shape manage-rial behavior (Dutton & Jackson, 1987). Issuesinterpreted as highly salient, and thus having aperceived material expressive and instrumentalrelationship, are more likely to garner a sub-stantive response. Dutton and Ashford used sim-ilar logic to suggest that “management’s alloca-tion of attention to an issue is a necessaryprecursor to their taking substantive action onan issue” (1993: 404). Because the issue is per-ceived to have materiality in its relationshipwith the firm’s cognitive structures, the firm will


respond in a material manner by committingsubstantial resources, time, energy, and effort tothe issue.

In contrast, responsiveness to less salient is-sues is likely to be more symbolic in nature.That is, firms may seek to signal compliancewith external demands while, in reality, con-tinuing in their own incumbent self-interest (Ol-iver, 1991). Instead of genuinely conforming toexternal standards, firms will portray confor-mity through symbolic action, allowing them togain legitimacy and other benefits while doinglittle to change firm processes and cognitions(DiMaggio & Powell, 1983; Suchman, 1995). In-deed, symbolic responsiveness is seen as anactive attempt by firms to manipulate externalexpectations to be more closely aligned withfirm goals (Oliver, 1991). Thus, firms often usesymbolic management to deal with external ex-pectations that do not align with the firms’ ex-pressive or instrumental goals. Additionally,given limited capacity to process and respond toexternal stimuli, including stakeholder issues(Cyert & March, 1963; Daft & Weick, 1984; Finkel-stein et al., 2009), managers must prioritize is-sues, substantively responding to those issuesmost critical to the organization and symboli-cally responding to those issues found to be lessimportant. Stakeholder issues perceived asmoderately salient enjoy some level of prioritybut do not capture the attention or responsive-ness granted to higher-salience issues.

In addition to the substance of responsive-ness, we also consider its form. We draw fromresearch on strategic issues management, im-pression management, and identity manage-ment (e.g., Dutton & Jackson, 1987; Elsbach, 2003;Elsbach & Kramer, 1996) to suggest that respon-siveness can be defensive or accommodative innature, depending on issue consistency or con-flict, respectively. Issues perceived as materi-ally consistent with a firm’s cognitive structuresengender an accommodative response, whereasconflicting issues engender a defensive re-sponse. If viewing the issue in negative terms, afirm employs a defensive response to distanceitself from the issue, uphold existing cognitivestructures, and attempt to eliminate the per-ceived threat of the issue (Dutton & Jackson,1987; Elsbach & Kramer, 1996). In contrast, a firmemploying an accommodative response em-braces the issue, viewing it in positive terms. Inthis sense accommodative responsiveness is

similar to the concepts of dialogue (Logsdon &Van Buren, 2008, 2009) and stakeholder integra-tion (Heugens, 2002), which highlight a focalfirm’s willingness to engage with the sponsor-ing stakeholder in a positive and open manner.

We now address each section of Figure 2, be-ginning with issues having high salience giventheir alignment with both cognitive structures.

High Issue Salience andSubstantive Responsiveness

Cognitive consonance. Issues interpreted asconsistent with both organizational identity andstrategic frames are considered true opportuni-ties, whereas issues interpreted as conflictingwith both cognitive structures are consideredtrue threats. These issues appear in the top leftand bottom right corners of the dark shadedsection in Figure 2. An issue representing a trueopportunity allows an organization to expressits identity and promotes action that fits its in-strumental logic of strategic success. Underthese conditions, the issue will have high sa-lience, resonating with the firm’s cognitivestructures and being prioritized by managementas both an expressive and instrumental oppor-tunity. Such issues engender substantive ac-commodative responses as the firm embracesthe issue. For example, in response to concernsregarding its carbon emissions and use of coalenergy, New Belgium Brewing embraced the is-sue as a true opportunity and responded by be-coming the first brewery in the United Statescompletely powered by wind energy (Bundy,2012). Environmental stewardship and the pro-motion of sustainable change are core values inNew Belgium’s identity, so reducing carbonemissions by switching from coal to wind powerwas highly aligned with the firm’s expressivelogic. In addition, being the first firm in its in-dustry to rely on wind power allowed New Bel-gium to differentiate itself from competitors.New Belgium leveraged publicity from theswitch and is now well known and highly re-garded as a sustainable enterprise. Thus, from astrategic frame perspective, the move was ben-eficial in building the firm’s reputation andbrand (Ferrell & Hartline, 2011).

In contrast, a stakeholder issue representing atrue threat conflicts with both a firm’s identityand its strategic frame. Like a true opportunity,a true threat will be highly salient as managers


assess the nature and degree of the perceivedchallenge and formulate potential responses. Tominimize the likelihood of harm, the responsewill be defensive and substantive. A recent ex-ample is Google’s response to the U.S. Stop On-line Piracy Act (SOPA) bill. SOPA challengedGoogle’s identity as a facilitator of free speechand information. The bill also threatenedGoogle’s strategic frame, since compliance withthe act would have been excessively burden-some for Google and companies like it. Googleresponded by engaging in heavy lobbyingagainst the bill, deploying a large-scale public-ity campaign, and even threatening to black outthe webpage (Lyons, 2012).

Our examples of New Belgium and Googlerepresent substantive action and response bythe focal firms, indicating their willingness toengage and make a serious commitment to ad-dress the stakeholder issue. The responses cho-sen by these firms were highly publicized, costlyinitiatives and exemplify substantial respon-siveness to issues of high salience. The re-sponses took an accommodative or defensiveform, based on issue perception as consistent orconflicting, respectively, with both cognitivestructures. Thus, we propose the following.

Proposition 5a: Stakeholder issuesperceived only as true opportunitieswill elicit substantive accommodativeresponses from managers.

Proposition 5b: Stakeholder issuesperceived only as true threats willelicit substantive defensive responsesfrom managers.

Cognitive dissonance. Issues that are mate-rial to both cognitive structures may also be atodds—for example, an issue perceived as con-sistent with one structure may be conflictingwith the other. Such interpretations create cog-nitive dissonance for managers as they attemptto determine the appropriate response. An issueperceived to be conflicting with organizationalidentity yet consistent with an organization’sstrategic frame is an identity conflict. An issueconflicting with the strategic frame but consis-tent with identity is a frame conflict. These is-sues appear in the bottom left and top rightcorners of the dark shaded section in Figure 2.Dissonance between expressive and instrumen-tal logics is familiar to researchers in the field of

business ethics. The basis of an ethical dilemmais the idea that one’s identity or conception ofthe self—a core construct related to values andethical beliefs—is at odds with the optionsavailable to enacting this identity (Carroll &Buchholtz, 2009); in other words, “Who I am/whatI value” conflicts with “What it takes tosucceed.”

In reviewing research on organizational iden-tity, Ashforth and colleagues suggested thatvarious factors influence the degree of disso-nance between a firm’s identity and strategicaction, including “situational constraints, com-peting identifications, impression managementconcerns, and so on” (2008: 331). Issue-specificcharacteristics, including the salience of thesponsoring stakeholder, the institutional envi-ronment surrounding the issue, and the inten-sity of the issue itself, can also constrain andinfluence perceptions of an issue. Consider anissue consistent with identity yet conflictingwith strategic frames, such as demands from anidentity-relevant stakeholder for strategic initia-tives incompatible with a firm’s current strate-gic frame. Given the potential implications forthe firm, the issue will be substantively priori-tized. Indeed, Ashforth and Mael (1996) arguedthat the most salient issues are those that in-voke ambiguity or disagreement between afirm’s cognitive structures. However, while itseems evident that issues of cognitive disso-nance command salience and, thus, substantiveresponsiveness, the form of response is likely tobe neither accommodative nor defensive.

Stakeholder issues have been characterizedas “socially constructed disruptions of institu-tional order” or ongoing battles of sensemakingand sensegiving whereby combating partici-pants attempt to influence the social environ-ment (Lamertz, Martens, & Heugens, 2003: 82).Those stakeholder issues that induce identity orframe conflict represent a particularly strongdisruption of order—a “sensebreaking” or “dis-locating” event that triggers a fundamentalquestioning of one’s sense of self (Ashforth et al.,2008; Ashforth & Mael, 1996; Pratt & Foreman,2000). Such events constitute an explicit “shiftfrom the experience of immersion in projects to asense that the flow of action has become unin-telligible in some way” (Weick, Sutcliffe, & Ob-stfeld, 2005: 409). In response to the cognitivedissonance created by the conflict, managerswill engage in efforts to bring about consensus


or alignment among competing frames (Fest-inger, 1957; Jackson, 2002; Strauss, 1978; Swann,1987). In other words, perceived inconsistencesin a firm’s understanding of itself and its strate-gic goals call for a renegotiation of the statusquo (Strauss, 1978). Thus, we suggest that inresponse to identity and frame conflicts, firmswill engage in substantive negotiation, whichwe define as efforts by a focal firm to bringconsonance to the interpretive logics used tounderstand an issue.

Google’s identity conflict involving its foreignexpansion to China highlights this sensebreak-ing-negotiation response. Committed to free ex-pression and open access to information,Google struggled with censorship by the Chi-nese government while recognizing the poten-tial to serve the largest economy in the world(Levy, 2011). Executives at Google valued theintroduction of their search engine to China,even on the government’s restrictive terms, be-cause of its consistency with strategic goals.However, insiders at Google also grappled withthe move’s misalignment with corporate iden-tity. After multiple run-ins with Chinese author-ities, Google announced that it was

no longer willing to continue censoring our re-sults on Google.cn, and so over the next fewweeks we will be discussing with the Chinesegovernment the basis on which we could operatean unfiltered search engine within the law, if atall. We recognize that this may well mean havingto shut down Google.cn, and potentially our of-fices in China (Drummond, 2010: 1).

Documented internal disputes among Googlefounders and current executives indicate thestrife over reconciling business growth withcontinued governmental compliance, and, ulti-mately, Google withdrew from mainland Chinaand ended its experiment in censorship(Levy, 2011).

An example of frame conflict is New Belgium’smove to distribute its product in aluminum cansinstead of glass bottles, based on evidence thatcans are more environmentally friendly (Bundy,2012). This strategy was consistent with NewBelgium’s identity as an environmentally con-scious organization. However, when consumersvoiced their displeasure with the change andclaimed that the new packaging reduced prod-uct quality, New Belgium faced a frame conflictsince the new strategy risked widespread rejec-tion by consumers. In response, the organization

engaged in extensive external negotiation, issu-ing press releases and reports highlighting theenvironmental friendliness of cans and disput-ing claims that product quality was suffering.

Just as New Belgium Brewing attempted toresolve its frame conflict over sustainable pack-aging, Google conducted broad negotiation ef-forts in an attempt to resolve its identity conflictover censored operations in China. Organiza-tions facing identity or frame conflict are likelyto respond by engaging in substantive negotia-tion, ideally until the issue becomes either con-sonantly aligned or immaterial to one or both ofthe dissonant cognitive structures.

Proposition 6: Stakeholder issues per-ceived only as identity or frame con-flicts will elicit substantive negotia-tion responses from managers.

In sum, stakeholder issues with high saliencegarner substantive responses from managers.By definition, such issues have a high degree ofresonance and priority and, thus, receive man-agerial attention in a meaningful and signifi-cant way. Given the vast assortment of stake-holder concerns brought to firms on an ongoingbasis, and given that firms face cognitive andresource limits in their ability to respond to ev-ery issue, we next address issues perceived assalient to only one cognitive structure. Theseissues appear in the light gray sections ofFigure 2.

Moderate Issue Salience andSymbolic Responsiveness

Some issues may be perceived as material toonly one cognitive structure. As noted above, thedefining element of issue salience to identity isa perceived relationship with an organization’sexpressive logic such that the issue presents asignificant influence on a firm’s ability to ex-press or enact its identity. We also suggest thatsome attempts to express identity have little todo with strategic performance or goals (Rowley& Moldoveanu, 2003). The same is true for stra-tegic frames; although perceived as instrumen-tally salient, some issues fail to connect withidentity. Issues perceived as consistent (or con-flicting) with organizational identity yet unre-lated to strategic frames are expressive oppor-tunities (or expressive threats), while issuesconsistent (or conflicting) with only strategic


frames are instrumental opportunities (or instru-mental threats). These four issue types encour-age firm responsiveness that is largely symbolicin nature.

We have established that stakeholder issuesmaterially related to strategic frames follow aninstrumental logic. Two matters of corporategovernance reform involving shareholder reso-lutions illustrate how firms respond to such in-strumental issues. Between 2005 and 2009, pow-erful investment advisory services andgovernance watchdog groups launched wide-spread campaigns supporting two separate gov-ernance reforms: shareholder proxy access andadoption of a majority-vote standard for board ofdirector elections. Excluding advantages givento first movers, these initiatives were largelyimmaterial to most firms as a matter of organi-zational identity. However, in the case of themajority-vote standard, the policy quickly dif-fused and received broad institutional support.As a source of structural legitimacy (DiMaggio &Powell, 1983), the policy was quickly recognizedas consistent with strategic frames, creating aninstrumental opportunity for institutional andshareholder compliance. However, the responseto such issues was largely symbolic. Indeed, theCouncil for Institutional Investors, one of thestrongest proponents of majority vote, has re-cently expressed concerns regarding the sym-bolic way in which the policy seems to havebeen adopted (CII, 2010; Lublin, 2009). Westphaland Zajac (1994, 1998; Zajac & Westphal, 1995)found a similar effect in their studies investigat-ing adoption of executive long-term incentiveplans. Early adopters implemented the plans inearnest, whereas later adopters’ implementa-tion was largely symbolic as firms attempted togain legitimacy yet maintain strict control overtheir structures and processes. Without a strongconnection to identity there was little incentivefor firms to substantively implement the policy,especially since stakeholders seemed mollifiedby simple adoption, thus allowing the adoptingfirms to take advantage of the instrumentalopportunity.

In contrast, allowing shareholders full proxyaccess would have been a substantial change incorporate governance at publicly traded firms,and the proposal was met with widespread re-sistance. Thus, proxy access as a shareholderissue presented an instrumental threat since theissue conflicted with strategic frames. Firms

generally responded by allowing the issue to goto nonbinding vote on proxy ballots, thus per-mitting them to signal consideration of the issuewithout invoking any true reform. The issuemanaged to garner some attention but ulti-mately had little lasting effect on organizationaldecision makers. Dutton and Dukerich (1991) de-scribed a similar response to an instrumentalthreat in their study of the Port Authority of NewYork and New Jersey. The Port Authority’s initialinterpretation of the presence of homeless indi-viduals in its facilities was largely instrumen-tal; the Authority perceived little connectionbetween the issue and its identity. The organi-zation responded symbolically, asking externalpartners to deal with the issue rather than sub-stantially addressing the issue itself. Until thePort Authority’s interpretation of the issueevolved to recognize that the issue was identityrelevant as well, its response was symbolic anddefensive.

In contrast to the instrumental logic of strate-gic frames, stakeholder issues salient to organi-zational identity yet unrelated to strategicframes follow an expressive logic. Again, weoffer examples to illustrate stakeholder issueslikely to resonate with identity yet unlikely to beprioritized in strategic decision making. Re-quests for philanthropy and community involve-ment often offer a firm an expressive opportu-nity to enact deeply rooted values withoutmaterially affecting pursuit of strategic objec-tives (e.g., Margolis & Walsh, 2003). For example,Moir and Taffler (2004) suggested that donationsmade by IBM to the nonprofit ArtSkills werelargely altruistic, meaning the donationswere not connected to IBM’s business strategy orstakeholder relationships. Thus, the donationswere largely symbolic and disconnected frominstrumental logic, only serving an expressivepurpose.

Alternatively, requests that actively opposecore beliefs and self-concept yet have little to dowith strategic frames represent expressivethreats. Consider stakeholder activists such asPETA or Greenpeace, which often use extremesmear campaigns against companies they per-ceive as violating animal or environmentalrights. Often lacking legitimacy in the eyes ofthe public (Mitchell et al., 1997), such campaignsgenerally have little impact on a target firm’sstrategic performance. Without a solid connec-tion to strategic outputs or goals, these issues


are unrelated to strategic frames, and so firmsrespond symbolically and defensively. For ex-ample, Starbucks used a product derived fromcrushed insects as a red food-coloring additivein some of its coffees and smoothies. PETA andvegan activists raised concerns and organized achange.org campaign against Starbucks, claim-ing its use of the additive was deceptive, unnat-ural, and unfriendly to vegan consumers (Shute,2012). Starbucks initially responded by issuing apress release explaining that the additive wasnaturally occurring, FDA approved, and com-monly used by food preparers in order to avoidartificial ingredients; thus, using the additivemaintained Starbucks’ commitment to providingsafe and natural products. Eventually, Star-bucks switched to a product derived from toma-toes, although some argue that such a moveremains deceptive (Mestel, 2012). Regardless,Starbucks initially perceived the issue aslargely expressive, and its response was gener-ally symbolic and defensive.

In summary, symbolic responsiveness repre-sents an attempt by firms to resolve issues thatare perceived as materially related to only onecognitive structure and, thus, only moderatelysalient. Issues perceived as consistent or con-flicting with strategic frames alone are instru-mental opportunities and threats, and issuesconsistent or conflicting with identity alone areexpressive opportunities and threats. The formof responsiveness corresponds with issue type,wherein a consistent issue signals an opportu-nity for symbolic accommodative responsive-ness while conflict signals a threat for symbolicdefensive responsiveness.

Proposition 7a: Stakeholder issuesperceived only as instrumental or ex-pressive opportunities will elicit sym-bolic accommodative responses frommanagers.

Proposition 7b: Stakeholder issuesperceived only as instrumental or ex-pressive threats will elicit symbolicdefensive responses from managers.

Low Issue Salience and Nonresponsiveness

Finally, some issues are perceived as imma-terial—that is, not related to either an organiza-tion’s identity or strategic frame. These nonis-sues can be found in the lower right section of

Figure 2. Extending the stakeholder activismexamples above, some activism involves broadcampaigns conducted without meaningful tar-gets or purposeful association between the is-sue and the focal firm. While the stakeholdergroup may be passionate about the issue, incon-sequence to strategic cognition renders the is-sue easily ignored and dismissed (Marens, 2002;Rowley & Moldoveanu, 2003). An example of anonissue is the movement urging companies toreincorporate in North Dakota, which enactedthe most shareholder-friendly corporate gover-nance law in the United States (Tuna, 2008).Since that change, a group of activist investors,including noted shareholder activist Carl Icahn,has targeted major corporations with resolu-tions urging them to reincorporate in North Da-kota. Five years later, only American RailcarIndustries, Inc., majority controlled by Icahn,has approved the proposal (Marketwatch, 2009).According to Richard Ferlauto, the head of cor-porate governance and pension investment atthe American Federation of State, County andMunicipal Employees, “This is more a wake-upcall for Delaware to modernize than any signif-icant attempt to attract business in North Da-kota” (Tuna, 2008: B6). Of course, events such asshareholder litigation can change a nonissueinto a true or instrumental threat, but as long assuch concerns are unrelated to both organiza-tional identity and strategic frames, they largelyrepresent nonissues to managers.

Issues perceived as unrelated to strategic cog-nition—that is, immaterial to organizationalidentity or strategic frames—will lack salienceand, thus, by definition, be unlikely to resonatewith or be prioritized by management. Low sa-lience also implies little to no responsiveness,and such issues may be momentary distractionsor nuisances among the diverse landscape ofstakeholder demands. The nonissue holds nei-ther importance nor meaning in how firms inter-pret the external environment and managestakeholder relationships.

Proposition 8: Stakeholder issues per-ceived only as nonissues will elicit lit-tle to no response from managers.

Table 1 summarizes our arguments and exam-ples related to firm responsiveness and issuesalience.


DISCUSSION AND CONCLUSION

Our ultimate goal in presenting a cognitivetheory of issue salience is to establish a newresearch agenda for exploring firm responsive-ness to stakeholder concerns. We advance the-oretical understanding of stakeholder concernsby proposing issue salience as a distinct con-struct driven by cognitive interpretations of theissue. In contrast to previous work, we modelissue salience as the key antecedent of firmresponsiveness to stakeholder concerns. Wecontribute to research by positioning issue sa-lience as an intermediating construct, the out-come of firm perceptions of issue characteristicsand a cognitive process through which externalissue factors are interpreted. Additionally, ourtreatment of organizational identity and strate-gic frames as simultaneous but unique con-structs advances research in strategic cognition,which traditionally has considered only the in-fluence of one structure or has lumped the con-structs together (Narayanan et al., 2011). Thus, inexplicating the dual nature of issue salience, weadvance research investigating the multiplemotivations of managers in responding to stake-holder demands.

We also contribute to research by explicitlyconsidering how issue salience relates to firmresponsiveness. Not only do we consider howmanagerial attention is cognitively organized,but we propose a typology of issue type andresponsiveness to translate attention into ac-tion. By providing a cognitive explanation for afirm’s response in both substance and form, wecontribute to our understanding of symbolicmanagement and firm responsiveness. We ad-dress instances of cognitive dissonance and in-

troduce negotiation as a discrete response tosuch situations. In doing so we also advance ourunderstanding of how stakeholders and the is-sues they champion can induce change or altera firm’s cognition.

While we propose issue salience as the focalpoint, we recognize that firms manage multipleissues at once and that issues evolve over time.How an issue is perceived by managers is dy-namic, and while our typology classifies levelsof salience and discusses expected responses,the separation between categories and quad-rants may be superficial. Thus, consistent withthe recommendations of Doty and Glick (1994),we present a variety of issue types that repre-sent complex constructs and provide an abstractand falsifiable model for future testing. Onefruitful area for future research is the cyclical oriterative nature of issue salience and respon-siveness. It is likely that responsiveness willshape subsequent requests and inputs to per-ceptions of salience, from contextual character-istics to cognitive understanding of the issue athand. The relationship between salience andresponsiveness may be reinforcing; initial sa-lience influences initial responsiveness, whichinfluences future salience, and so on. Futurework could refine this iterative model, identifyother important dimensions, and investigate po-tential limits or boundaries to the influence ofsalience. Like Proffitt and Spicer (2006), we rec-ognize that there may be value in capturing theentire life cycle of an issue, including its earliestinception, in order to understand fully the evo-lution of an issue’s meaning and interpretation.

Our theory also offers opportunities to explorethe mediating nature of strategic cognition and

TABLE 1Firm Responsiveness and Examples

Issue Type Expected Response Example

True opportunity Substantive accommodative New Belgium Brewing and wind powerTrue threat Substantive defensive Google and SOPA legislationIdentity conflict Substantive negotiation Google and ChinaFrame conflict Substantive negotiation New Belgium Brewing and aluminum cansInstrumental opportunity Symbolic accommodative Majority-vote and LTIP adoptionInstrumental threat Symbolic defensive Proxy access and New York/New Jersey Port AuthorityExpressive opportunity Symbolic accommodative Altruistic philanthropy: IBM and ArtSkillsExpressive threat Symbolic defensive Extreme activism: PETA and StarbucksNonissue No response Gadfly shareholder resolution: reincorporation in North Dakota


to refine our understanding of strategic out-comes. Scholars have employed various per-spectives to explain strategic change, using arational lens to examine direct effects of envi-ronmental conditions such as uncertainty, com-petition, or regulation (e.g., Haveman, 1992;Wiersema & Bantel, 1993) or using a cognitivelens to view how environmental context affectsstrategy through managerial cognition (Barr etal., 1992; Brown & Blackmon, 2005). Rajagopalanand Spreitzer (1997) integrated these disparateperspectives to propose a multilens frameworkof strategic change in which environmental con-ditions affect strategy through managerial cog-nition. Our theoretical model of issue salienceresponds to their call for research exploringstrategic change as reflective of both environ-mental antecedents and managerial cognition,and our logic suggests that institutional andstakeholder effects may directly influence stra-tegic cognitive structures and, thus, indirectlyinfluence issue salience. In other words, strate-gic cognition represents the key mediating pro-cess by which external factors translate to issuesalience within the firm. Previous researchnotes that external stimuli are more likely to beperceived as reinforcing cognitive structuresrather than altering them (e.g., Barr et al., 1992;Gary & Wood, 2011). Thus, exploring when issuecharacteristics such as institutional attention orstakeholder salience are more likely to chal-lenge or impel change in strategic frames andorganizational identity may be an interestingarea for future research.

Our theory also connects to the large body ofwork on stakeholder activism and firm perfor-mance, in both financial and social terms. Areview of stakeholder theory suggests that ap-propriate stakeholder management should beassociated with increased financial perfor-mance, reputation, trust, efficiency, innovation,and flexibility and should be negatively relatedto risk and uncertainty (Parmar et al., 2010). Sim-ilarly, a separate review of the shareholder ac-tivism literature supports a positive relationshipbetween responsiveness and short-term finan-cial performance (Gillan & Starks, 2007), al-though empirical research has also reported anegative relationship between responsivenessand social performance (David et al., 2007). Webelieve that work exploring connections be-tween stakeholders and performance will espe-cially benefit from focusing on issue salience

and that empirical studies incorporating ourmodel may be productive avenues for additionalresearch. By focusing on issue salience, re-searchers can begin to better understand howinstitutional, stakeholder, and cognitive forcescombine to influence firm outcomes.

Theory to date does not explain how firmsdecide between competing stakeholder claims(Kaler, 2006) or how firms effectively respond toindividual requests when faced with multiple,conflicting demands (e.g., Hadani, Goranova, &Khan, 2011). Our model of issue salience enablesresearchers to address these vexing questions.Additional theoretical development may furtherexplore the influence of organizational decisionmakers outside the top management team, aswell as the potential for agency issues withinthe executive suite. An upper echelons perspec-tive views the background and experiences oftop managers as highly influencing organiza-tional outcomes (Hambrick & Mason, 1984); thus,a lens of managerial cognition or other more“micro” approaches may further enrich our un-derstanding of the realities of managing andcrafting responses to stakeholder concerns.

Organizational identity and strategic frameseach represent extensive bodies of research,and our typology focusing on the consistent orconflicting relationship between an issue andeach structure provides only an initial step atmapping the complexity of the strategic cogni-tion process and corresponding salience ofstakeholder issues. We do not attempt to captureall aspects of strategic cognitive structures andleave for future theorizing the opportunity todeepen our understanding of the interrelation-ship between these mechanisms and the influ-ence of potential moderators. While we view therelationship between identity and strategicframes to be independent and reciprocal, weencourage future research to explore the poten-tial contingency and moderating factors thatmay influence this relationship.

For example, organizational identity scholarsdiscuss contingency factors such as the multidi-mensionality and strength of identification(Ashforth & Mael, 1996), which may further ad-vance our theory of how firms process and pri-oritize stakeholder concerns, especially in in-stances of cognitive dissonance. Firms withstrong identities often frame issues that are con-sistent with organizational identity as beingstrategic as well (Ashforth & Mael, 1996; Gioia &


Thomas, 1996). Thus, an organization like John-son & Johnson, whose identity centers on serviceto consumers, will strategically frame issuesfrom this stakeholder group as instrumentalsimply because of their proximity and connec-tion to identity. In other words, the expression ofan organizational identity relative to a particu-lar stakeholder is also instrumental to achiev-ing organizational objectives. Similarly, the re-lationship of an issue to strategic frames may beinfluenced by the firm’s strategic flexibility (Nad-karni & Narayanan, 2007), its scanning orienta-tion, or its perceived ability to control an issue(Thomas et al., 1993). Additional dynamic factorssuch as the timing of issues, the urgency ofstakeholder claims, and even the stochastic na-ture of information processing are also likely toaffect whether and how an issue commandshigh salience.

If issue salience influences firm responsive-ness, in general, we might also expect an influ-ence on performance outcomes. However, thisrelationship is highly complex. For example, re-sponsiveness to an issue based on strong con-sistency with organizational identity could actu-ally hurt performance, such as when a firmchooses to donate a large percentage of profitsto a specific cause in order to maintain a phil-anthropic self-concept. Recognizing a range offirm responsiveness including substantive, sym-bolic, and negotiation responses, in concert withthe cognitive process determining issue sa-lience, may allow scholars a rich opportunity toexplore the true nature of the relationship be-tween responsiveness and performance.

Our attention to issue salience also informsthe research stream specifically related to sym-bolic management (Meyer & Rowan, 1977; West-phal & Zajac, 1998). Highly salient issues arelikely to engender substantive responses frommanagers, based on their alignment with bothorganizational identity and strategic frames.However, our typology also describes how a per-ceived material relationship with only one cog-nitive structure may promote more symbolic orsatiating responses. Future research could focuson the interplay between managerial symbol-ism and decoupling and issue salience. Howdoes the level and nature of issue salience in-fluence the significance and scale of firm re-sponse? Are there repercussions to enactingsymbolic responses to salient issues? Do firmsrespond differently to expressive versus instru-

mental opportunities or expressive versus in-strumental threats? Connecting the construct ofissue salience to managerial symbolism can in-form our understanding of the antecedents andconsequences of symbolic responses.

We also recognize the possibility that theremay be additional drivers of each aspect withinour model and that issue salience may be asecond- or even third-order construct. We knowthat stakeholder salience itself is a multidimen-sional construct (Agle et al., 1999; Crawford, Wil-liams, & Berman, 2011; Mitchell et al., 1997) andthat between- and within-firm factors, as well asexternal factors, are likely to influence issuesalience and firm responsiveness. While mostprevious work has explored issue and stake-holder characteristics driving firm response, wehighlight how exemplary stakeholder, issue-specific, and environmental issue characteris-tics may influence the interpretation of salience.Our intention was not to formulate a fully satu-rated model of responsiveness to stakeholderconcerns. Instead, we propose a first step bycalling attention to strategic cognition as a me-diating process and issue salience as a percep-tual outcome influencing responsiveness. Inbalancing the challenges of integrating multi-ple perspectives and providing a parsimonioustheoretical model, we hope our initial steps willfacilitate broad and varied extensions of orga-nizational and stakeholder research in thefuture.

We acknowledge that the construct of issuesalience specifically presents challenges forempirical testing. Perhaps prior research haslikely concentrated on singular environmentalfactors or stakeholder variables as drivers offirm responsiveness because of their more ac-cepted and readily available archival mea-sures. Strategic cognition, interpretation, andsensemaking are difficult to capture without pri-mary data, and so the development of our modelcould benefit from case study or other qualita-tive research design, which may motivate fur-ther inductive theory building. Researchershave used similar approaches when investigat-ing complex cognitive processes such as iden-tity change and evolution (e.g., Clark, Gioia,Ketchen, & Thomas, 2010). Techniques employ-ing content analysis also present promising op-portunities to test our model (e.g., Duriau, Reger,& Pfarrer, 2007), including the use of wordcounts, computer-aided content analysis, and


other methods focused on analyzing firm com-munication to determine managerial cognitiveorientation (Cho & Hambrick, 2006; Kaplan,2008). Additionally, cognitive mapping as a formof content analysis has been a popular methodfor capturing strategic frames (Huff, 1990). How-ever, much of this research has focused on non-evaluative variables, such as counts of key-words indicating strategic focus andmanagerial attention (Kabanoff & Brown, 2008).Because we position issue salience as cognitiveinterpretation, a simple examination of publicfilings might be confounded by organizationalattempts at impression management (Abraham-son & Hambrick, 1997).

We encourage multimethod research to ex-plore the relationships posited in our model andsuspect that scholars may find such researchdesign to be especially fruitful, in line with workusing qualitative and quantitative data to as-sess cognitive processes of managers in recog-nizing threats versus opportunities (Gregoire,Barr, & Shepherd, 2010). Well-executed studiesemploying multiple methodologies not only of-fer rich evidence with greater generalizabilitybut also are more likely to be highly cited, high-impact papers in the long run (Molina-Azorin,2012). A promising setting to employ a multi-method technique is within the phenomenon ofshareholder resolutions (e.g., David et al., 2007;Logsdon & Van Buren, 2008). Future researchcould employ qualitative content analysis tech-niques, such as cognitive mapping, to analyzetext contained within shareholder requests andfirm responses. Such analysis, combined withthe traditional quantitative response variablesused to investigate shareholder resolutions (cf.David et al., 2007), may reveal how identity andstrategic frame influence a firm’s prioritizationof shareholder issues and subsequent nature ofresponsiveness. Empirical research could alsofollow multiple issues within one firm, one issueacross multiple firms, or even the evolution ofissue salience as an issue changes in relation tofirm cognitive structures, as with Walmart’s in-vestment in sustainability initiatives. Despitethe challenges of empirically testing our overar-ching model, we hope that our focus on issuesalience will help to clarify previous findingsand to advance our understanding of respon-siveness to stakeholder issues and the complexrelationships between the organization and itsmany stakeholders.

In conclusion, we believe that an issue sa-lience perspective contributes to scholarshipand practice in several ways. We develop themediating role of strategic cognition to issuesalience, recognizing the importance of organi-zational identity and strategic frames in under-standing how stakeholder issues resonate withorganizational decision makers. This contribu-tion also reflects practical implications for orga-nizations with respect to stakeholder respon-siveness. While other stakeholder researchconsiders the characteristics of stakeholders orpatterns of targeting firms with their demands,we focus on the firm and the cognitive process ofhow issues become more or less salient. Werecognize that managers must identify, under-stand, and assign priority to an issue beforethey can respond to any demands accessory tothe issue and that responsiveness includes abroad collection of choices for action and en-gagement aligning with the firm’s willingnessor commitment to address the issue. Particularlypromising is research motivated by our theoret-ical model to help firms better manage relation-ships with stakeholders and respond to theirvast array of preferences and requests.

While we develop a cognition-based theoreti-cal model regarding firm perceptions of stake-holder issues, we believe our model also haspractical applications. Firm managers andstakeholders need only look inward and exam-ine the firm’s identity and strategic frame tounderstand how the firm might respond to anissue. With this understanding, managers canexamine stakeholder issues for core character-istics related to their cognitive structures andcraft appropriate responses. Similarly, externalstakeholders may attempt to frame their con-cerns consistent with a firm’s cognitive struc-tures in order to achieve desired objectives andengagement with the targeted organization.Whether firms consciously or more subliminallymanage stakeholder relationships, we also en-vision implications of our theory for organiza-tional outcomes, such as financial and socialperformance. We suggest a number of avenuesfor additional theorizing and empirical testingand hope that our overarching model constitutesa meaningful research agenda to enrich our un-derstanding of the relationship between stake-holder concerns and firm responsiveness.


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Jonathan Bundy ([email protected]) is a doctoral candidate in strategic management atthe Terry College of Business, University of Georgia. His research interests includestakeholder management, reputation and social evaluations, corporate corruptionand crises, and corporate governance.

Christine Shropshire ([email protected]) is an assistant professor of manage-ment at the Terry College of Business, University of Georgia. She received her Ph.D.from Arizona State University. Her research is in the area of corporate governance,including interlocking directors, board composition and effectiveness, diversity in theupper echelons, and stakeholder management.

Ann K. Buchholtz ([email protected]) is Professor of Leadership andEthics at Rutgers Business School and research director of the Institute for EthicalLeadership. She received her Ph.D. from the Stern School of Business at New YorkUniversity. Her research concerns ethics and social responsibility, with a focus oncorporate governance.


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