The literature shows that social media enhances individual stakeholders’ ability to directly influence firm behaviors, paying less attention to how it enables different stakeholder groups to influence firms collectively. Drawing on the stakeholder multiplicity perspective in stakeholder theory, this study theorizes and empirically demonstrates that social media can empower lower-salience stakeholders to drive the actions of higher-salience stakeholders to influence firm behaviors. By analyzing 506 consumer crises involving foreign and local companies in China from 2000 to 2020, we find that firms take more substantial responsibility when confronted with consumers’ social-media-based collective actions than when confronted with conventional channels of consumer complaints. This heightened responsibility stems mainly from collective actions’ tendency to spur law-enforcing agencies into addressing alleged firm misdeeds, demonstrating a stakeholder multiplicity effect of social media empowerment. We also identify the institutional contingency of this effect, showing that local governments’ bureaucratic capacity positively moderates collective actions’ effect on law-enforcing actions, whereas their intervention in firms’ operational decisions negatively moderates law-enforcing actions’ effect on firms’ responsibility assumption. This study extends the understanding of social media's relationship with stakeholder influence and consolidates the stakeholder multiplicity perspective in stakeholder theory.

In this study, we use the context of corporate social responsibility (CSR) suspension and provide a case study from China to show how conditions allowed shareholders to seize power and alter a firm's mission. We show that managers reacted to a change in shareholder power by changing their priorities to correlate with shareholder influences. Our dynamic model first highlights the importance of precipitating events that allowed shareholders to seize power. In response, managers rebalanced their priorities, paid more attention to the shareholders who demanded higher profits, and suspended ethical and discretionary responsibilities as a result. We further present evidence that CSR suspension subsequently harms relationships between stakeholders and threatens firm survival. We contribute to stakeholder theory by providing a dynamic model for interpreting stakeholder influences and managers’ subsequent responses. We add to corporate social responsibility studies by providing a more nuanced understanding of CSR suspension.