Business and Peace: The Impact of Firm–Stakeholder Relational Strategies on Conflict Risk

Abstract

We explain how a firm’s relational strategies impact conflict risk in the broader network of societal relations. To make this contribution, we highlight how managerial decisions are evaluated, and acted on, not only by the firm’s stakeholders, but also by others attentive to their group’s access to, and control over, economic, political, and social assets in comparison to other groups with whom they are in conflict. We show that, when firm actions that form or break ties in its stakeholder network inhibit the ability of groups to reach mutually acceptable settlements on the relative distribution of the costs and benefits from firm operations, conflict risk in the broader societal network increases. We thereby emphasize that managerial decisions in the normal course of business can impact conflict risk, even if unintentionally, by changing the structure of relationships between groups in conflict-affected areas.