Stakeholder theory

The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications Author(s): Thomas Donaldson and Lee E. Preston Source: The Academy of Management Review, Vol. 20, No. 1 (Jan., 1995), pp. 65-91 Published by: Academy of Management Stable URL: http://www.jstor.org/stable/258887 Accessed: 20/04/2010 23:08 Your use of the JSTOR archive indicates your acceptance of JSTOR 's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR 's Terms

The stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization.[1] It was originally detailed by R. Edward Freeman in the book Strategic Management: A Stakeholder Approach, and identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address the "Principle of Who

Question: Taking into account Figure 3.4 on page 45 of your textbook (Stakeholder Typology: One, Two, or Three Attributes Present) discuss the ‘Ethics in Practice case’ on page 46 (Are Plants and Flowers Stakeholders? Do they have rights?) Freeman (1984, P. 46) popularized the definition of a stakeholder as ‘. . . ANY group or individual who can affect or is affected by the achievement of the organization’s objectives’. This is a very broad definition meaning that in today’s global business environment

Stakeholder theory and definition Stakeholder is defined as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman 1984). Stakeholder theory, when introduced in the 1980s, signify a major change in how relationships within a business might coexist and benefit one another. The concept of “Stakeholder theory” or “stakeholder thinking” is about identifying groups who are stakeholder in a corporation and manage them. It states that organizations

Introduction A stakeholder is an individual or association who can affect or be affected by the business’s activities. They might have neither direct nor indirect interest in the firms. Form a decent connection between stakeholders and firms is vital because stakeholders can contact with the firm very often or just in emergency situation to get up to date with the activities of the business. In one way or another, the reputation of stakeholders are influenced by every activities of the business,

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

been regarded to devote solely to the company’s shareholders. However, this notion is seen as immoral. This is because according to the notion of corporate social responsibility, business must behave ethically, represents a broader recognition of stakeholders and must take into account economic, social and environmental inputs in the way it operates. Hence, people against the notion of shareholder primacy suggest that the director should also take into account the interest of a wide range of shareholders

Agency theory It is an acknowledged fact that the principal-agent theory is generally considered the starting point for any debate on the issue of corporate governance emanating from the classical thesis on The Modern Corporation and Private Property by Adolf Berle and Gardiner Means. According to this thesis, the fundamental agency problem in modern firms is primarily due to the separation between finance and management. Modern firms are seen to suffer from separation of ownership and control and

Larry Chapman Business Ethics Exam Two The Stakeholder theory of a firm is made up into equal percentages on a pie chart, which is made up of Financials, Suppliers, Employees, Customers and Communities. The Stockholder theory of a firm is made up by a pyramid structure consisting of Labor, Management, CEO, Board and Stockholders. I believe the Stakeholder theory is less ethical than the stockholder theory in terms of Libertarianism and Egoism. Libertarianism view points are that there is no

During the late twentieth century, different ideas became popular about how best to manage a firm. The first theory which emerged was Stockholder theory, which encouraged managers to act as agents for the company’s legal owners: it’s stockholders. This theory held that it was the function of a firm to act in the best interests of its owners by focusing on maximizing profits. Ensuring that the stockholders’ investments paid off was the fiduciary duty of the managers of this firm. However, some managers