Social proactiveness and innovation: The impact of stakeholder salience on corporate entrepreneurship

Innovation has become a major strategic component of corporate entrepreneurship. Managerial decisions regarding innovative activity are complex and can be affected by numerous factors. In this study, we draw upon the tenets of stakeholder theory to examine how stakeholder salience (consisting of stockholders, employees, and customers) is integral to the decisions made by senior level managers related to social proactiveness within a corporate innovation strategy. In doing so, we introduce a social proactiveness scale that examines a manager’s priorities toward internal and external social issues. Examining 200 senior-level managers, we find that companies which place salience on employees are more proactive on both internal and external social issues, while those placing salience on stockholders are more proactive on internal social issues but not external social issues. Surprisingly, placing salience on customers is associated with neither internal nor external social issues. Finally, the data suggests that proactiveness related to internal social issues leads to greater internal innovation with external innovation mediating the relationship, whereas proactiveness on external social issues is not related to innovation.