Are Customers 10x More Important to Firms than Employees? Empirical Analysis of Imbalance in Emphasis Between Two Stakeholders

51 Pages Posted: 23 Sep 2022

See all articles by Nandil Bhatia

Nandil Bhatia

Columbia University - Columbia Business School, Management

Stephan Meier

Columbia University - Columbia Business School

Date Written: September 1, 2022

Abstract

Employees and customers are arguably two of the most critical stakeholders for businesses. This paper documents a stark imbalance among scholars and practitioners regarding the relative emphasis between these two stakeholders. Text analysis of earnings call transcripts of S&P 500 firms reveals that executives talk about customers 10 times more often than employees. And when they do, executives perceive customers to be analogous to opportunities and employees to risks. A bias towards customers (relative to employees) continues to be omnipresent across board compositions in the United States (and outside) and the academic domain of strategic management. The patterns shed light on a discrepancy inconsistent with existing theory and rhetoric of firms and should inform a discussion about the sources and consequences of this imbalance.

Keywords: customers, employees, stakeholders, customer-centricity, employee-centricity

Suggested Citation

Bhatia, Nandil and Meier, Stephan, Are Customers 10x More Important to Firms than Employees? Empirical Analysis of Imbalance in Emphasis Between Two Stakeholders (September 1, 2022). Columbia Business School Research Paper No. 4215010, Available at SSRN: https://ssrn.com/abstract=4215010 or http://dx.doi.org/10.2139/ssrn.4215010

Nandil Bhatia (Contact Author)

Columbia University - Columbia Business School, Management ( email )

665 West 130th Street
New York, NY 10027
United States

Stephan Meier

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

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