The Relationship between Stakeholder Salience and Financial Performance

Understanding the relationship between stakeholder management and organizational performance would allow managers to allocate firm's resources more efficiently, and hence prioritize the most important stakeholders. With a view to addressing this issue, this paper aims to analyze the relationship between stakeholders' salience and financial performance. The salience model is based on the managers' perception of three stakeholders' attributes: power, legitimacy and urgency. The sample is made up of 108 Brazilian companies and the data were collected from the definitive prospects of the companies that made public offers on shares in 2003 to 2013 from the Economatica (R) database. The methodological procedures were carried out into two stages, at first we developed a content analysis and in the second we analyzed the salience-performance relationship by using Pearson's correlation and multiple regression models. Findings present evidence of a positive and significant relationship between the salience of customer and employee stakeholders between long term financial performance. As a contribution, this study empirically tests the relationship between salience and financial performance in the Brazilian context.