An empirical test of stakeholder influence strategy models: Evidence from business downsizing in Taiwan

Philip C.F. Tsai*, C. Rosa Yeh, Shu Ling Wu, Ing Chung Huang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

31 Citations (Scopus)


Frooman's model of stakeholder influence strategies uses levels of resource dependence to determine the power of stakeholder influence. Our study provides initial empirical tests of his model applied in business downsizing. Data from 18 recently downsized firms in Taiwan, including nine multinational corporations (MNCs), were plotted against the Frooman model. We found that resource-dependence alone as Frooman theorized could not explain the influence strategies that stakeholders (in this case the employees) took in response to firms' downsizing decisions. Further investigation revealed that the institutional factors had a significant effect on how firms structured their downsizing initiatives and hence changed the way the employees reacted to firm decisions. We proposed a new model using both resource-dependence and institutional legitimacy as determinants of stakeholder influence strategy and suggested relationships between these determinants and stakeholder actions. This proposed model has profound research implications for the strategic stakeholder theory, as well as practical implications for human resource management.

Original languageEnglish
Pages (from-to)1862-1885
Number of pages24
JournalInternational Journal of Human Resource Management
Issue number10
Publication statusPublished - 2005 Oct 1
Externally publishedYes


  • Downsizing
  • Influence strategy
  • Institutional theory
  • Resource dependence
  • Stakeholder

ASJC Scopus subject areas

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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