Stakeholder Theory and Competing Concept

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Stakeholder theory was given by R. Edward Freeman, which was expressed many ways to represent the stakeholder as an important part of the corporate responsibility. According to Stenberg (1996), this stakeholder theory, is basically not capable to provide better corporate governance. He also stated that, this theory is unable to provide a better view of business performance (Edward & Reed, 1983).
Currently, the stakeholder theory has been grown up from its origin and seen as the concept of Value Maximization in the business firm. It is one of the important goals of the business organization (Werther & Chandler, 2005). In the present time, stakeholder theory allows the business firms to define the role and responsibility of
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This group is also known as the workforce of the company. The employees follow the duty, which are mention in their job description.
The role of external stakeholders is also plays an important role in the growth of the business firm. The biggest group of external stakeholders in a firm is the group of customers. This group is also known as the primary stakeholders of the firm (Frémond, 2005). Customers mean, the consumers, who use the services and products of the firm and invest their money in the development of the organization (Werther & Chandler, 2005). It is the primary responsibility of the firm to satisfy the customers, because high customer satisfaction allows the firm to enjoy good profits.
Another group of external stakeholders are suppliers, who provide raw material and other important components and part to the firm to produce final products and services. Suppliers affect the efficiency and ability of the firm to attract the customers (Brooks, Mllne & Johansson, 2002).
Government is the stakeholders that increase the ability of the firm to compete in the fair and free trade environment. These stakeholders also allow the firm to concentrates on the ethical and integral business practices and welfare of the employees as well as the customers (Jones, 2004). The government defines regulations and work practices for the business firm and also give punishments to those business organization, which breaks
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