Stakeholder Theory

Relationships with international students can be beneficial to higher education in terms of financial and human resources. For this reason, establishing and maintaining such relationships are usually pre-eminent concerns. In this study, we extended the application of the disconfirmation expectation model by incorporating components from subjective task value to predict the loyalty of international students toward their host countries. On a sample of 410 Vietnamese students enrolled in establishments of higher education in over 15 countries across the globe, we employed (...) structural equation model to construct the conceptual model. Our empirical findings revealed that while the roles of satisfaction and disconfirmation are still important as direct and indirect antecedents of international student loyalty, its most powerful predictors are the three components of subjective task value: attainment, utility and intrinsic. These insights result in a number of implications for actors on the higher ducation scene, such as heads of institutions and policy makers. (shrink)

Game theory involves deliberating about what to do in light of what other people are likely to do. One of the central frameworks of game theory is the prisoner’s dilemma, in which participants who make rational choices end up in suboptimal outcomes. Using the prisoner’s dilemma to model competition between firms sets the stage for a new and promising approach to business ethics: the market failures approach.

The inclusion of stakeholders in science is one of the core ideas in the field of responsible innovation. Conspiracists, however, are not your garden-variety stakeholders. As the COVID-19 pandemic has shown, the conflict between conspiracists and science is deep and intractable. In this paper, we ask how the game of responsible innovation can be played with those who believe that the game is rigged. Understanding the relationship between conspiracism and responsible innovation is necessary in order to understand the unvisited corners (...) of the science-society interface in the post-pandemic future. We claim that pluralism, already part of the philosophical background that spurred responsible innovation, can offer insights into how conspiracism can be approached. As a case in point, we develop these insights starting from the policy on conspiracism developed in 2021 by the European Commission. We show that the ideal of inclusion can only be extended to conspiracists by accepting a pluralist framework, and we explain this pluralist response. (shrink)

In the last two decades, a robust consensus has emerged among philosophers of science, whereby political, ethical, or social values must play some role in scientific inquiry, and that the ‘value-free ideal’ is thus a misguided conception of science. However, the question of how to distinguish, in a principled way, which values may legitimately influence science remains. This question, which has been dubbed the ‘new demarcation problem,’ has until recently received comparatively less attention from philosophers of science. In this paper, (...) I appeal to Rawls’s theory of justice (1971) on the basis of which I defend a Rawlsian solution to the new demarcation problem. As I argue, the Rawlsian solution places plausible constraints on which values ought to influence scientific inquiry, and, moreover, can be fruitfully applied to concrete cases to determine how the conflicting interests of stakeholders should be balanced. After considering and responding to the objection that Rawls’s theory of justice applies only to the “basic structure” of society, I compare the Rawlsian solution to some other approaches to the new demarcation problem, especially those that emphasize democratic criteria. (shrink)

Packed with examples, this book offers a clear and engaging overview of ethical issues in business. -/- It begins with a discussion of foundational issues, including the objectivity of ethics, the content of ethical theories, and the debate between capitalism and socialism, making it suitable for the beginning student. It then examines ethical issues in business in three broad areas. The first is the market. Issues explored are what can be sold (the limits of markets) and how it can be (...) sold (ethics in marketing). The second is work. Topics in this area are health and safety, meaningful work, compensation, hiring and firing, privacy, and whistleblowing. The third area is the firm in society. Here readers explore corporate social responsibility, corporate political activity, and the set of ethical challenges that attend international business. -/- Issues are introduced through real-world examples that underscore their importance and make them come alive. Arguments for opposing positions are given fair hearings and students are encouraged to develop and defend their own views. (shrink)

The COVID-19 crisis opened up discussions on using online tools and platforms for academic work, e.g. for research (management) events that were originally designed as face-to-face interactions. As social scientists working in the domain of responsible research and innovation (RRI), we draft this paper to open up a dialogue on Responsible online Research and Innovation (RoRI), and deliberate particular socioethical opportunities and challenges of the onlineification in collaborative theoretical and empirical research. An RRI-inspired ‘going online’ approach would mean, we suggest, (...) trying to make academic events and research activities more inclusive, researchers’ attitude to their work more reflective and suggest processes that are more responsive to societal needs and ethical concerns. For such systematic reflection, we suggest using the RRI-heuristic provided by Owen et al., and applying the dimensions of ‘Anticipation, Inclusion, Reflection and Responsiveness’ (AIRR) in order to identify and reflect on the dilemmas involved in ‘going online’ in one’s research. (shrink)

Traditional approaches to conflict are oriented towards establishing (or re-establishing) consensus, either in the form of a resolution of the conflict or in the form of an ‘agree-to-disagree’ standstill between the stakeholders. In this paper, we criticize these traditional approaches, each for specific reasons, and we propose and develop the agonistic approach to conflict. Based on Chantal Mouffe’s agonistic democratic theory, the agonistic approach to conflict is more welcoming of dissensus, replacing discussion stoppers with discussion starters and replacing standstills with (...) contestation. We illustrate such replacements and develop this approach, we analyse technological conflicts in a concrete R&D setting: the global hydrogen economy. From this context, we focus on the conflict between the proponents of blue hydrogen (drawn from fossil fuels) and those of green hydrogen (created through electrolysis). We conclude by highlighting the advantage of the agonistic approach but also drawing attention to its own specific risk, namely, antagonism. (shrink)

R&D collaborations between industry, government, civil society, and research (also known as ‘quadruple helix collaborations’ (QHCs)) have recently gained attention from R&D theorists and practitioners. In aiming to come to grips with their complexity, past models have generally taken a stakeholder-analytical approach based on stakeholder types. Yet stakeholder types are difficult to operationalise. We therefore argue that a processual model is more suited for studying the interaction in QHCs because it eschews matters of titles and identities. We develop such a (...) model in which the QHC is represented as a process of generating four types of value: research value, market value, political value, and societal value. We then apply this processual model in analysing reallife cases of friction in QHCs. Friction is seen, not as an interpersonal clash, but as a discrepancy between two or more value-creation processes that compete for limited resources (some overperforming while others under-performing). (shrink)

We propose the use of discussion structures as tools for analyzing policy debates in a way that enables the increased participation of lay stakeholders. Discussion structures are argumentation-theoretical tools that can be employed to tackle three barriers that separate lay stakeholders from policy debates: difficulty, magnitude, and complexity. We exemplify the use of these tools on a debate in research policy on the question of responsibility. By making use of discussion structures, we focus on the argumentative moves performed by the (...) parties involved in this debate. We conclude by discussing advantages and limitations of discussion structures and we trace several opportunities for further research on these instruments. (shrink)

In the business ethics literature, many argue that managerial decision making ought to be improved by more robust ethical concerns. Some see the virtue of “practical wisdom” as the key for improved managerial decision making. However, because of the epistemic limitations confronting decision makers in the face of irreducible market complexity, there is a risk that practical wisdom, employed in the context of day‐to‐day managerial decision making, becomes an impractical concept. Nevertheless, if the attempt to incorporate virtue ethics (and its (...) related concepts) into business practices is laudable, if indeed a virtuous life is worth pursuing and practical wisdom plays an essential role toward that end, it is important to attempt to salvage practical wisdom and uncover its appropriate usage. Thus, this article pursues two major ends. First, upon surveying some of the prominent and standard usages of the term, it articulates concerns, rooted in epistemic limitations, about the way that practical wisdom appears in business ethics literature. Second, it offers a new way forward for understanding “practical wisdom.” By contextualizing day‐to‐day, rule‐based managerial decision making within the ethical value of the market order, practical wisdom reappears as the higher‐order capacity to pursue vocations, as morally worthwhile projects, in business. (shrink)

Shareholders assume risk by investing. Sollars and Tuluca (2018) argue that while this does not justify a managerial policy of shareholder wealth maximization, it does justify compensating shareholders at the oftencalculated cost of equity—the cost that investors require given the level of risk they assume. Here, I show that this can be unfair if the cost of equity is unfair. I then show how shareholder wealth maximization as a managerial imperative is better justified on other grounds.

How can we understand the way the Weyland Corporation in the Alien Franchise devalues its employees? How can we explain our repulsion at such treatment. This article surveys several foundations for the the employee-employer relationship including stockholder theory, stockholder theory, and libertarian theories. The stockholder theory may be the operating view of the corporation, but is is morally questionable due to refusing to grant employees full moral status. The libertarian view is willing to grant employees full moral status, but in (...) attempting to morally justify poor treatment of employees, it relies on several unworkable assumptions highlighted by A. Hirschman's theory about exit, voice and loyalty. Stakeholder theory provides the foundation for understanding and condemning the poor treatment of employees in the Alien Franchise. (shrink)

Jones and Felps claim that social welfare would be enhanced, if corporate managers adopted the goal of directly improving the happiness of their stakeholders instead of profit maximization. I argue that their argument doesn’t establish this. They show that a utilitarian case for profit orientation cannot be made from the armchair. But neither can the case for Jones and Felps’ preferred alternative. And their defense of it relies on empirically unsubstantiated assumptions.

Several European and North American states encourage or even require, via good Samaritan and duty to rescue laws, that persons assist others in distress. This paper offers a utilitarian and contractualist defense of this view as applied to corporations. It is argued that just as we should sometimes frown on bad Samaritans who fail to aid persons in distress, we should also frown on bad corporate Samaritans who neglect to use their considerable multinational power to undertake disaster relief or to (...) confront widespread social ills such as those currently befalling public health (obesity) and the environment (climate change). As such, the corporate duty to assist approach provides a novel justification for sustainable business practices in such cases. The paper concludes by arguing that traditional stakeholder approaches have not articulated this duty of assistance obligation, though a new utilitarian stakeholder theory by Thomas Jones and Will Felps may be coextensive. (shrink)

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should support giving all (...) stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed. (shrink)

This paper argues that the notion of value has been overly simplified and narrowed to focus on economic returns. Stakeholder theory provides an appropriate lens for considering a more complex perspective of the value that stakeholders seek as well as new ways to measure it. We develop a four-factor perspective for defining value that includes, but extends beyond, the economic value stakeholders seek. To highlight its distinctiveness, we compare this perspective to three other popular performance perspectives. Recommendations are made regarding (...) performance measurement for both academic researchers and practitioners. The stakeholder perspective on value offered in this paper draws attention to those factors that are most closely associated with building more value for stakeholders, and in so doing, allows academics to better measure it and enhances managerial ability to create it. (shrink)

The nature of stakeholder theory and its fundamental normative prescriptions are the subject of much confusion and academic debate. This article attempts to provide an account of both the fundamental normative implications of stakeholder theory and the theory’s range of application that both stakeholder advocates and critics can agree upon. Using exclusively the language of leading stakeholder theorists, the article identifies the essential prescriptions of the theory and the type of organizations to which stakeholder theory applies in the hope of (...) facilitating effective discussion and evaluation of the normative dimension of stakeholder theory. (shrink)

This chapter discusses two major approaches to business ethics which rest on the foundation of social contract theory: the contractualist position of Integrative Social Contracts Theory (ISCT) and the contractarian position of Order Ethics. Both are summarized and analyzed critically. It turns out that Order Ethics might remedy some defects of ISCT.

The Handbook of Business Ethics: Philosophical Foundations is a standard interdisciplinary reference handbook in the field of business ethics. Articles by notable philosophers and economists examine fundamental concepts, theories and questions of business ethics: Are morality and self-interest compatible? What is meant by a just price? What did the Scholastic philosophers think about business? The handbook will cover the entire philosophical basis of business ethics. Articles range from historical positions such as Aristotelianism, Kantianism and Marxism to systematic issues like justice, (...) religious issues, rights and globalisation or gender. The book is intended as a reference work for academics, students (esp. graduate), and professionals. (shrink)

This paper proposes a description of the moral obligations of economic agents. It will show that a threefold division should be adopted to distinguish moral obligations applying to their interactions in the market, obligations applying to their interactions inside business firms and obligations applying to their interactions with agents outside the market. Competition might be permissible in the first case since markets are special patterns of social interactions (called adversarial schemes). They produce their benefits when agents try to satisfy exclusive (...) preferences at the expense of others. However, moral obligations inside the firm and moral obligations outside the market are of a different nature. This argument will be developed in the two first parts of this paper. In the third part, it will outline the relevant strengths of that account in relation with two popular views of economic agents’ moral obligations: the shareholder primacy view and the stakeholder theory. (shrink)

The profit motive refers to what is generally taken to be the underlying motivation of business and commercial activity: to collect revenues in excess of costs or, more simply, to make money. While both “profit” and “profit motive” may be given more technical definitions in economics, the latter's meaning is typically broader in philosophical discussions and so, for example, even managers of nonprofit organizations may be accused of sometimes acting from a profit motive. The profit motive is typically the object (...) of ambivalent moral attitudes in present-day society: on the one hand, the plethora of commodities and services made possible by the modern market economy, fuelled to a large extent by the profit motive, are easily recognizable. On the other hand, it is generally regarded as a serious moral criticism to say of a certain commercial agent that he or she is motivated by profit alone, and pecuniary motives are often associated with selfishness and greed (see Egoism). (Compare comments like: “While it perhaps was a good thing that company X supported this social venture, they are not to be trusted – they only did it for the money!”). (shrink)

A review of the stakeholder literature reveals that the concept of "normative core" can be applied in three main ways: philosophical justification of stakeholder theory, theoretical governing principles of a firm, and managerial beliefs/values influencing the underlying narrative of business. When considering the case of Wall Street, we argue that the managerial application of normative core reveals the imbedded nature of the fact/value dichotomy. Problems arise when the work of the fact/value dichotomy contributes to a closed-core institution. We make the (...) distinction between open- and closed-core institutions to show how in the case of the closed-core, ethical decision-making is viewed by the institution as a separate domain from the core business of the institution. The resulting blind spot stifles meaningful exchanges with stakeholders attempting to address the need for reform. We suggest in conclusion that ethical considerations are less about casting a value judgment and more about creating a process for meaningful conversation throughout an institution and its stakeholders. (shrink)

To better illuminate aspects of stress that are relevant to the moral domain, we present a definition and theoretical model of “moral stress.” Our definition posits that moral stress is a psychological state born of an individual’s uncertainty about his or her ability to fulfill relevant moral obligations. This definition assumes a self-and-others relational basis for moral stress. Accordingly, our model draws from a theory of the self (identity theory) and a theory of others (stakeholder theory) to suggest that this (...) uncertainty arises as a manager faces competing claims for limited resources from multiple stakeholders and/or across multiple role identities. We further propose that the extent to which the manager is attentive to the moral aspects of the claims (i.e., moral attentiveness) moderates these effects. We identify several consequences of managerial moral stress and discuss theoretical, empirical, and practical implications of our approach. Most importantly, we argue that this work paves an important path for considering stress through the lens of morality. (shrink)

This paper focuses attention on the stakeholder attribute of legitimacy. Drawing upon institutional and stakeholder theories, I develop a framework of stakeholder legitimacy based on its three aspects—legitimacy of the stakeholder as an entity, legitimacy of the stakeholder’s claim, and legitimacy of the stakeholder’s behavior. I assume that stakeholder legitimacy is socially constructed by management and that each of its three aspects exists in degree in the manager’s perception. I discuss how these aspects interact and change over time, and propose (...) an agenda for future research on stakeholder legitimacy. (shrink)

This paper argues that Rawls’ principles of justice provide a normative foundation for stakeholder theory. The principles articulate (at an abstract level) citizens’ rights; these rights create interests across all aspects of society, including in the space of economic activity; and therefore, stakeholders – as citizens – have legitimate interests in the space of economic activity. This approach to stakeholder theory suggests a political interpretation of Boatright’s Moral Market approach, one that emphasizes the rights/place of citizens. And this approach to (...) stakeholder theory – in terms of citizens – raises a further question, what rights and obligations do economic agents have, beyond those attached to their roles as citizens? Rawls would reject additional rights and obligations of this sort for two reasons, one tied to freedom and one tied to pluralism. Rawls’ work therefore presses us to re-conceptualize the place of ethical claims in the economic context. (shrink)

Business ethics – both stockholder and stakeholder theories – makes the same mistake as the one made by the traditional ethics of medicine. The traditional ethics of medicine was a teleological ethics predicated on the assumption that the goal of medicine was to prolong life and promote better health. But, as bioethicists have made plain, these are not the only or even the overriding goals of most patients. Most of us have goals and values that limit our desire for medical (...) treatments. Similarly, the view of the stockholder in business ethics is that the stockholder has only one interest – profit. If stockholders have no other values or interests that would limit their desire for additional profit, their sole interest is in profit maximization. But investors are real people with interests and values that balance and limit their desire for profit. It would be an extremely odd individual who cared for nothing except more profit. And institutional investors are supposed to serve the interests of individual investors. Stockholders hold many stakes in the firms in which they invest. The conclusion that most stockholders have interests that would limit the pursuit of maximum profit has significant implications both for business ethics and for the management of for-profit corporations. Something like “informed consent for investors” is needed. Corporate managers, to the extent that they are to be agents of their stockholders, must not simply pursue profit maximization. They must ascertain the interests and values of their investors that limit the single-minded pursuit of profit. (shrink)

Stakeholder theory is one of the most influential theories in business ethics. It is perhaps not surprising that a theory as popular as stakeholder theory should be used in different ways, but when the disparity between different uses becomes too great, it is questionable whether all the ‘stakeholder research’ refers to the same underlying theory. This paper starts to clarify this definitional confusion by distinguishing between three different ways in which different lines of stakeholder research are connected with descriptive and (...) instrumental stakeholder theory. First, a distinction is made between research connected with descriptive and with instrumental stakeholder theory as defined by Donaldson & Preston in the narrow or broad sense. Second, a distinction is made between research that interprets descriptive and instrumental stakeholder theories as either hypotheses or research areas. Third, a distinction is made between research that interprets Donaldson & Preston’s central concept of ‘stakeholder management’ as either behaviour or rationale. Finally, the paper discusses the implications of these differences for empirical research into stakeholder theory. (shrink)

Much ink has been spilt over the last decade in discussion of the theories and practices of social enterprise — see especially Peattie and Morley2 for a comprehensive review of the field, including of other reviews. This brief paper is about a specific aspect of these theories and practices: the effort to establish social enterprises as distinctive from others in having at least a double bottom-line (or in some cases a triple bottom-line, or even some greater multiple of bottom-lines). The (...) effort to establish this distinction does not fit comfortably with Freeman’s ideas about stakeholders, as exemplified in his suggestion that ‘all of those groups and individuals that can affect, or are affected by, the accomplishment of the business enterprise’ should be taken into account by its managers.3 The main feature of the multiple bottom-line is, on the contrary, that only some interests, not all, should be taken into account in decision making. I do not claim that the multiple bottom-line is the sole distinctive characteristic of organisations defined (by themselves or other) as social enterprises, but it is the only characteristic that concerns me in relation to stakeholder theory in this paper. I also do not claim that stakeholder theory consists only of a view about who should be taken into account by managers, but this is the only element of stakeholder theory that concerns me, in this paper, in relation to social enterprises; and all other aspects of social enterprise theory and practice, and all other aspects of stakeholder theory, will have to wait until another day. (shrink)

Although arguments are a good way of exploring the limitations and complexities of a concept or a theory we may find ourselves faced with a real phenomenon that challenges the existing formulations of a concept or a theory so strongly and reveals its limitations to us so starkly that we are forced to break away from the current discussion and start anew. Such is the challenge posed by the phenomenon of farmer suicides on our existing theories of corporate social responsibility. (...) Contemporary discussions in corporate ethics are replete with many theories of corporate social responsibility which in one way or the other rely on the concept of the social contract. For the most part these theories have gone unchallenged and no fundamental limitations have been revealed. However, the phenomenon of farmer suicides in central India poses a serious challenge to them. This article attempts to show how the phenomenon of farmer suicides in central India starkly exposes some of the fundamental limitations of the contractarian formulations of corporate social responsibility. (shrink)

This article is the final one in a series of four papers investigating the stakeholder approach to running businesses. It argues that the optimally viable version of that approach is one in which employees have a co-equal status as stakeholders with shareholders (the maximum allowed for under stakeholder theory) while other groupings only have a minimal status as stakeholders and are generally restricted to just customers, suppliers, and lenders. This version is argued for on the grounds that it both overcomes (...) the implementation problems attendant upon having to serve the interests of a range of groupings and is justified in terms of stakeholder membership being confined to those groupings with a claim on the services of a business in virtue of directly contributing to its economic functioning. The ranking of non-shareholder stakeholders in the recommended version and, in particular, the maximal ranking granted to employees is argued to reflect the scale of the various contributions as measured by the degree to which making it exposes those stakeholders to both financial risk and a non-financial “work-related” risk peculiar to employees. It is concluded that although this is the best available version of the stakeholder approach it may not be the best of all possible ways of running a business. (shrink)

Stakeholder Theory (ST), presented by R. Edward Freeman, is a managerial theory which sees the firm as ‘connected networks of stakeholder interests’. The purpose of the firm in Freeman’s theory is ‘value creation and trade’ and ‘creation of value for each appropriate stakeholder’. This article argues that although ST presents important insights, its view of the firm is incomplete and its vision of the purpose of the business in society needs to be refined.

The primary appeal of stakeholder theory in business ethics derives from its promise to help solve two large and often morally difficult problems: (1) how to manage people fairly and efficiently and (2) how to determine the extent of a firm's moral responsibilities beyond its obligations to enhance its profits and economic value. This article investigates a variety of conceptual quandaries that stakeholder theory faces in addressing these two general problems. It argues that these quandaries pose intractable obstacles for stakeholder (...) theory which prevent it from delivering on its large promises. Acknowledging that various versions of stakeholder theory have made a contribution in elucidating the complex nature of firms and business decision making, the article argues that it is time to move on. More precise explications of the nature of modern firms focusing on the application of basic moral principles to different business contexts and situations are likely to prove more accurate and useful. (shrink)

At least since the publication of the monumental Strategic Management: A Stakeholder Approach (1984), the “stakeholder theory” originated by R. E. Freeman has engrossed much of the business ethics literature. Subsequently, some advocates have moved a bit too quickly and without proper definition or argument. They have exceeded Freeman’s intentions which are more libertarian and free-market than is often thought. This essay focuses on the versions of stakeholder theory directly authored or coauthored by Freeman in an effort to recover (1) (...) Freeman’s intentions and (2) the argumentative justification of stakeholder theory. It then argues that Freeman’s appeal to legal, economic, and ethical constraints ultimately produce arguments that are invalid. One can thoroughly support legislation constraining corporations or seeking to prevent age discrimination, market monopolies, and externalities and regret the extent that capitalism is heir to such shortcomings without it following that (1) business beneficiaries should be changed from stockholders to stakeholders and (2) the latter should be given serious decision-making power. Further, stakeholder theory neither defines nor battles any obvious opposition. Hence, it is difficult to see what it changes about business management. In short, stakeholder theory either changes too much about business, or nothing important at all (depending on one’s interpretation). Efforts to supplant or improve the reigning theory of capitalism will have to do better. (shrink)

A quick look at what is happening in the corporate world makes it clear that the stakeholder idea is alive, well, and flourishing; and the question now is not “if ” but “how” stakeholder theory will meet the challenges of its success. Does stakeholder theory’s “arrival” mean continued dynamism, refinement, and relevance, or stasis? How will superior stakeholder theory continue to develop? In light of these and related questions, the authors of these essays conducted an ongoing dialogue on the current (...) state and future of stakeholder thinking. Beginning with a review of research and theory that has developed since the major stakeholder theorizing efforts of the 1990s, the authors individually offer their perspectives on the key issues relevant today to stakeholder thinking, and to suggest possible approaches that might lead toward and enable the continuing development of superior stakeholder theory. (shrink)

The success of the stakeholder theory in management literature as well as in current business practices is largely due to the inherent simplicity of the stakeholder model––and to the clarity of Freeman’s powerful synthesised visual conceptualisation. However, over the years, critics have attacked the vagueness and ambiguity of stakeholder theory. In this article, rather than building on the discussion from a theoretical point of view, a radically different and innovative approach is chosen: the graphical framework is used as the central (...) perspective. The major shortcomings of the popular stakeholder framework are systematically confronted with the graphical scheme to illustrate their visual impact. The graphical illustrations of the imperfections help explain the sometimes-oversimplified generalisation inherent to every graphical model. They also make some interrelationships easier to understand. The analysis demonstrates that, with the tacit but implicit acceptance of simplification of the discussed explanatory elements, Freeman’s framework remains a rather good approximation of reality. Only a few minor changes to the stakeholder model are consequently proposed. (shrink)

In multi-stakeholder networks, actors from civil society, business and governmental institutions come together in order to find a common solution to a problem that affects all of them. Problems approached by such networks often affect people across national boundaries, tend to be very complex and are not sufficiently understood. In multi-stakeholder networks, information concerning a problem is gathered from different sources, learning takes place, conflicts between participants are addressed and cooperation is sought. Corporations are key actors in many networks, because (...) the problems addressed are frequently related to business activities. The aim of this article is to conceptualise multi-stakeholder networks by proposing a problem-centred stakeholder definition. From an analysis of several case studies, a life cycle model is deduced that distinguishes seven phases: initiation, acquaintance, first and second agreement, implementation, consolidation and institutionalisation. (shrink)

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four (...) problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept. (shrink)

In this workshop, a decentered approach to stakeholder theory is proposed, where a shared network problem, rather than a firm, frames stakeholder interactions. Two case studies are presented to illustrate the potential usefulness of adopting a decentered perspective on firm-stakeholder relations. Multi-stakeholder learning dialogues and actor-network theory are introduced as examples of possible theoretical frameworks that allow the adoption of a decentered perspective.

This paper is the third in a series of four that is directed at understanding and assessing stakeholder theory for the purposes of business ethics. It addresses the suitability and viability of the theory, rejecting objections of a moral and efficiency sort based (respectively) on claims about property rights and the economic superiority of the alternative stockholder approach, but accepting that implementation problems require limiting both the number of groupings admitted to stakeholder status and the degree of responsibility towards them. (...) The conclusion looks forward to the construction of a suitably limited version of the stakeholder approach in a fourth paper drawing upon this one and the previous two. (shrink)

While stakeholder theory has traditionally considered organization’s interactions with stakeholders in terms of independent, dyadic relationships, recent scholarship has pointed to the fact that organizations exist within a complex network of intertwining relationships [e.g., Rowley, T. J.: 1997, The Academy of Management Review 22(4), 887–910]. However, further theoretical and empirical development of the interactions between stakeholders has been lacking. In this paper, we develop a framework for understanding and measuring the effects upon the organization of competing, complementary and cooperative stakeholder (...) interactions, which we refer to as stakeholder multiplicity. We draw upon three forms of fit (i.e. fit as matching, fit as moderation, and fit as gestalts; Venkatraman, N.: 1989) to develop a framework for understanding stakeholder multiplicity based upon the direction, strength, and synergies of the interacting claims. Additionally, we draw upon the theory of stakeholder identification and salience of Mitchell et al. (1997), which we argue provides a more relevant and significantly more illustrative explanation of the nature and effects of stakeholder interactions upon the organization than the network approach of Rowley (1997). Furthermore, we ground our framework through reference to three stakeholder groups (i.e. governments, customers, and employees) and the stakeholder issue of concern for the natural environment. We propose a hierarchy of the multiplicity strength of influence of these three stakeholder groups. Potential measurement and implications are discussed. (shrink)

Stakeholder theory is widely recognized as a management theory, yet very little research has considered its implications for individual managerial decision-making. In the two studies reported here, we used stakeholder theory to examine managerial decisions about balancing stakeholder interests. Results of Study 1 suggest that indivisible resources and unequal levels of stakeholder saliency constrain managers’ efforts to balance stakeholder interests. Resource divisibility also influenced whether managers used a within-decision or an across-decision approach to balance stakeholder interests. In Study 2 we (...) examined instrumental and normative implications of these two approaches. We conclude by considering the contributions of this research. (shrink)

Stakeholder theory calls for decision makers to balance stakeholder interests, but before this can happen, management must understand how other parties view its decisions. Effective stakeholder dialogues convened to reach this understanding require management to appreciate how others perceive the risks posed by their decision. Although understanding others’ risk perception is crucial for effective communications, we do not have a clear idea of how viewing a situation from multiple stakeholder perspectives affects risk perception. Based on a technique derived from risk (...) perception studies of health and environmental issues, an experiment with 224 business students examined how an individual’s risk perception can account for both managerial and customer perspectives. Factors described as customer participation, extent of the effect, and management input, together with the respondent’s self-assessed understanding of the decision process, help categorize overall risk perceptions and are shown to be associated with behaviors based on the decision’s riskiness. Discussion includes implications for designs of business communications, including their content and transparency, and for understanding the audience for these communications. (shrink)

. Atomic individualism is embedded in most definitions of stakeholder theory, and as a result, stakeholders are not integral to the basic identity of the corporation which is considered to be independent of, and separate from, its stakeholders. Feminist theory has been suggested as a way of developing a more relational view of the corporation and its stakeholders, but it lacks a systematically developed conceptual framework for undergirding its own insights. Pragmatic philosophy is offered as a way of providing this (...) theoretical undergirding for . a relational understanding of the firm and its stakeholders. (shrink)

Most prominent arguments favoring the widespread discretionary business practice of sending jobs overseas, known as ‘offshoring,’ attempt to justify the trend by appeal to utilitarian principles. It is argued that when business can be performed more cost-effectively offshore, doing so tends, over the longterm, to achieve the greatest good for the greatest number. This claim is supported by evidence that exporting jobs actively promotes economic development overseas while simultaneously increasing the revenue of the exporting country. After showing that offshoring might (...) indeed be justified on utilitarian grounds, I argue that according to Rawlsian social-contract theory, the practice is nevertheless irrational and unjust. For it unfairly expects the people of a given society to accept job-gain benefits to peoples of other societies as outweighing job-loss hardships it imposes on itself. Finally, I conclude that contrary to socialism, which relies much more on government control, capitalism constitutes a social contract that places a particularly strong moral obligation on corporations themselves to refrain from offshoring. (shrink)

The Social Issues in Management Division has had a long history of research into various aspects of governmental influences on business. Recent years, however, have seen stakeholder theory sort of sweep the field, and under a stakeholder theory of capitalism, governments will matter less then they have in the past as stakeholder principles are implemented throughout the corporate world. This article will examine the nature of this claim by discussing problems with the implementation of stakeholder theory and examining the role (...) of public policy in our society. (shrink)

To be a coherent and genuinely alternative conception to the shareholder model, any moral stakeholder theory must meet the following conditions: It must be an ethical theory; It must identify a limited group as stakeholders; The group must be identified on morally relevant grounds; Stakeholder claims must be non-universal; And not held against everyone. A principle for identifying the stakeholder is suggested as a person who has much to lose – financially, socially, or psychologically – by the failure of the (...) firm. The emerging picture contrasts sharply with the conventional conception of the firm. (shrink)