Stakeholder Management and Leadership Effectiveness: Exploring Institutional Contingencies in Chin

Using a policy-capturing methodology, we explore how firm features and institutional factors condition Chinese executives’ assessments of CEO leadership effectiveness based on their stakeholder management practices. We find that although executives, in aggregate, significantly weight CEOs management practices associated with a number of stakeholders, they weight the CEOs practices related to shareholders’ and customers’ interests more highly than they do CEOs practices related to other stakeholder groups. Moreover, executives from smaller and non-state owned firms assign greater weight to practices related to customers’ interests and less weight on practices related to shareholder interests than executives from larger and state-owned firms. However, such differences tend to diminish when an executive is from a region that has a higher level of market competition or better market supporting institutions.