Stakeholder Theory Of The Firm

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Even though the stakeholder theory of the firm served as a comprehensive fundamentally solid concept for corporate social responsibility to branch out of; without the stakeholder theory of the firm there is no corporate social responsibility and vice versa, because business cannot exist without society and society is not sustainable without business, due to advancements in the modern world, business and society have evolved, and traditional business theories have a narrow business scope, while contemporary perspectives have a broader approach.
First, Without the stakeholder theory of the firm there is no corporate social responsibility and vice versa, because business cannot exist without society and society is not sustainable without business. According to R. Edward Freeman 1984, the stakeholder theory of the firm is about a conceptualised thought of how a firm works and creates value (youtube video). So, in order for us to understand what the stakeholder theory of the firm is about first the components of the theory should be defined. Stakeholders are groups or individuals who affect or are affected by the operations and or decisions of the organisation and contribute or are a necessity to the success or failure of the organisation. Stakeholders can be owners, managers, suppliers, employees, communities, financiers, government, non-profit bodies and customers even sometimes competitors (Freeman). Next, a firm is an establishment or a number of establishments that buy,

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