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The Vulnerability and Strength Duality in Ethnic Business: A Model of Stakeholder Salience and Social Capital

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Abstract

Managers in ethnic businesses are confronted with ethical dilemmas when taking action based on ethnic ties; and often as a result, they increase the already vulnerable positions of these businesses and their stakeholders. Many of these dilemmas concern the capital that is generated (or the lack of it) through variations in the use of ethnic stakeholder social ties. The purpose of this paper is to suggest a stakeholder-based model of social capital formation, mediated by various forms of ethnic ties, to explore the duality of ethnicity: it can aid and hinder an ethnic business. Drawing upon the social capital/economic development, stakeholder salience, ethnic businesses literatures, and (to some extent) on social identity theory, we develop a cyclical model of relationships among ethnic business stakeholder attributes (ethnic kinship-based power, ethnic-moral legitimacy, and ethnic-critical urgency) and social capital, as mediated by three-way (triadic) Simmelian bonding and bridging ties, which then, in turn, affects the ethnic stakeholder attributes. We argue that the development of bridging yet strong ties through this cyclical process is relevant for the improvement of the positions of ethnic businesses in terms of both economic success and social responsibility. Specifically, we suggest that, given the duality of ethnicity in business, managers can prioritize stakeholder relationships based upon how these stakeholder ties affect social capital.

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Notes

  1. Named after a concept developed by Georg Simmel (Krackhardt 1999), Simmelian ties are social linkages that encompass both the strength and the structure of a relationship (e.g., triads vs. dyads).

  2. Because the focal actor of interest for this paper is the manager of an ethnic business, the definition of Simmelian ties is centered on the manager. However, we are aware that other types of social actors can form such ties.

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Authors and Affiliations

  1. SolBridge International School of Business, Woosong Educational Foundation, Dong-gu, Uam-ro 128 (Samsung-dong), Daejeon, 300-814, Republic of Korea

    Alejandra Marin

  2. Jean Austin Bagley Regents Chair in Management, Area of Management, Rawls College of Business at Texas Tech University, 15th Street and Flint Avenue, Lubbock, TX, 79409, USA

    Ronald K. Mitchell

  3. Area of Management, Rawls College of Business at Texas Tech University, 15th Street and Flint Avenue, Lubbock, TX, 79409, USA

    Jae Hwan Lee

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  1. Alejandra Marin
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  2. Ronald K. Mitchell
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  3. Jae Hwan Lee
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Correspondence to Alejandra Marin.

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Marin, A., Mitchell, R.K. & Lee, J.H. The Vulnerability and Strength Duality in Ethnic Business: A Model of Stakeholder Salience and Social Capital. J Bus Ethics 130, 271–289 (2015). https://doi.org/10.1007/s10551-014-2207-7

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