A Stakeholder Approach to Strategic Management

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Darden Graduate School of Business Administration
University of Virginia
Working Paper No. 01-02
A Stakeholder Approach to Strategic Management
R. Edward Freeman
John McVea
This paper can be downloaded without charge from the
Social Science Research Network Electronic Paper Collection at: http://papers.ssrn.com/paper.taf?abstract_id=263511 A Stakeholder Approach to Strategic Management
R. Edward Freeman
John McVea
The Darden School
University of Virginia
Forthcoming in M. Hitt, E. Freeman, and J. Harrison (eds.)
Handbook of Strategic Management, Oxford: Blackwell
The purpose of this chapter is to outline the development of the idea of
"stakeholder management" as it has come to be applied in
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This support was necessary for long term success. Therefore, management should actively explore its relationships with all stakeholders in order to develop business strategies.
For the most part these developments had a relatively small impact on the management theories of the time. However, fragments of the stakeholder concept survived and developed within four distinct management research streams over the next twenty years. Indeed, it was by pulling together these related stakeholder concepts from the corporate planning, systems theory, corporate social responsibility and organizational theory that the stakeholder approach crystallized as a framework for strategic management in the 1980 's. What follows is a brief summary of these building blocks of stakeholder theory.
The Corporate Planning Literature
The corporate planning literature incorporated a limited role for stakeholders in the development of corporate strategy. Ansoff 's classic book Corporate Strategy (1965) illustrated the importance of identifying critical stakeholders. However, stakeholders difference is that the early use of the stakeholder idea was not particularly oriented towards the survival of the firm. Slinger 's argument can be found in his doctoral dissertation, Stakeholding and Takeovers: Three Essays, University of Cambridge, forthcoming in 2001. An abridged version is in "Spanning the Gap: The Theoretical
Principles Connecting Stakeholder Policies to Business Performance",
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