A Dynamic Stakeholder-Value Alignment Framework for Sustainable Firms

Thesis Abstract

This study addresses the challenge of aligning stakeholder interests with long-term value creation in sustainable firms, noting that misalignment undermines social license, legitimacy, and economic performance in dynamic market contexts. The aim is to develop and validate a Dynamic Stakeholder-Value Alignment Framework (DSVAF) that integrates stakeholder theory, legitimacy theory, and resource-based view to guide strategic decision-making toward simultaneous value for stakeholders and firm sustainability. Specific objectives are (1) to identify salient stakeholder groups and their value propositions across environmental, social, and governance (ESG) dimensions; (2) to conceptualize a dynamic alignment mechanism linking stakeholder value drivers to firm strategy and performance metrics; (3) to formulate a descriptive-analytical model and test its predictive power on sustainability outcomes; (4) to examine contextual contingencies such as industry volatility and institutional environment; and (5) to derive actionable governance mechanisms for real-time value alignment. The methodological design adopts a mixed-methods sequential explanatory approach. In the qualitative phase, 40 semi-structured interviews are conducted with C-suite executives, sustainability officers, and major stakeholder representatives from 20 firms across manufacturing, energy, and consumer goods sectors in Europe and North America, complemented by 15 focus groups with external stakeholders. This phase informs the operationalization of the DSVAF constructs and yields a theory-driven measurement instrument. In the quantitative phase, a cross-sectional survey is administered to 350 firm-level respondents, sampled via stratified random sampling to ensure representation of primary stakeholders and functional areas. Primary data are complemented by archival ESG scores and annual financial performance data for a 5-year window (2019–2023). Data collection instruments include a validated stakeholder value survey with multi-item scales for ESG orientation, legitimacy perception, and strategic alignment, as well as firm performance indicators such as Return on Assets (ROA), Composite ESG score, and market-based measures. Validity and reliability are ensured through pilot testing (n=40), confirmatory factor analysis, and Cronbach’s alpha thresholds above 0.70. The data analysis employs structural equation modeling (SEM) to test the proposed DSVAF model, multi-group SEM to explore industry and country differences, and time-series cross-lagged panel analysis to capture dynamic alignment effects. Complementary qualitative analysis uses thematic coding of interview and focus group transcripts, employing NVivo 12 and a constant comparative method to triangulate findings with quantitative results. Key expected findings include (a) identification of a core set of dynamic stakeholder-value drivers (e.g., environmental stewardship, fair labor practices, transparent governance, and shareholder-value responsiveness) that predict perceived strategic congruence and sustainable performance; (b) empirical validation of the DSVAF as a higher-order construct comprising stakeholder value fidelity, dynamic alignment capability, and sustainability performance; (c) evidence that higher alignment maturity correlates with superior ESG scores, reduced cost of capital, and enhanced stakeholder trust; (d) demonstration of contingency effects where industry dynamism and institutional pressures strengthen or weaken the alignment mechanism; and (e) robust differential effects across regions, highlighting the role of regulatory context. The study contributes to knowledge by offering the first integrated dynamic framework that links stakeholder value propositions with firm sustainability outcomes through a measurable alignment system, bridging gaps between stakeholder theory, legitimacy theory, and RBV within a practical governance model. Methodologically, it advances mixed-methods approaches to dynamic alignment in strategic management and provides a replicable measurement model and reporting toolkit for practitioners. The theoretical implications include reframing stakeholder value as a dynamic, co-evolving construct rather than a static set of expectations, and clarifying the processes through which firms translate stakeholder value into sustainable competitive advantage. Practically, the framework supplies governance levers, including stakeholder value dashboards, dynamic resource allocation protocols, and risk-monitoring mechanisms, enabling firms to respond adaptively to stakeholder signals. The main conclusion anticipated is that firms achieving ongoing, data-driven alignment between stakeholder value propositions and strategic decisions realize superior sustainable performance, particularly when supported by proactive governance and transparent reporting. Recommendations include embedding the DSVAF into corporate strategy offices, enhancing cross-functional integration, and adopting real-time ESG monitoring systems to sustain dynamic alignment in the face of changing regulatory and market conditions.