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abstract 

Prioritizing the potentially competing claims of multiple and diverse stakeholders is a critical task of top executives. How to respond to those claims is also very challenging, as these decisions often involve trade-offs and compromises.Stakeholder theory offers a theoretical scaffolding to begin to understand stakeholders’ salience. While extant studies have devoted attention to the tributes (power, legitimacy, and urgency) that elicit salience and the cognitive aspects of this process, the role of affect-based mechanisms has been relatively ignored. Moreover, there has been less progress in understanding behavioral responses that result from the perception of salience. In this paper,we advance the existing body of knowledge by unpacking the concept of top executives’ sensitivity to stakeholders, which we refer to as the extent to which they are positively inclined towards the claims introduced by a stakeholder group. We suggest that (a) CEOs sensitivity depends on attributes of both the stakeholder making the claim and the firm to whom the claim is directed; (b) sensitivity is driven by cognitive, as well as affective, mechanisms; and (c) the responses of executives will depend on the congruenceor divergence between the goals of the organization and the claims of the stakeholders. We focus our theory on family firms, where the effects of family ties and family-centered non economic goals pursued by family executives are keyto decision making. Our study extends knowledge of stakeholder management in the family business domain. It enriches the theory of stakeholder salience by introducing the neglected aspect of top executives’ sensitivity to stakeholders claims, yielding news insights into heterogeneous top executives’ responses to stakeholder claims and revealing important boundary conditions for stakeholder theory.