R. Edward Freeman

The Politics of Stakeholder Theory: Some Future Directions

The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of “business†together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business.

Stockholders and Stakeholders: A New Perspective on Corporate Governance

The purpose of this article is to show how the concept of stakeholders in an organization can be used to understand the tasks of the board of directors. The authors argue that a volunteeristic approach to questions of corporate governance which focuses on effective director behavior is preferable to structural change via legislation.

STAKEHOLDERS, SOCIAL RESPONSIBILITY, AND PERFORMANCE: EMPIRICAL EVIDENCE AND THEORETICAL PERSPECTIVES

The management of competing stakeholder interests has emerged as a significant topic in the management literature. Related issues are the relationship between stakeholder management and the perception that a firm is socially responsible, and the performance implications of both stakeholder management and social responsibility. Theory and models surrounding these issues are abundant, but empirical research is in an early stage. This research forum reports six excellent efforts to tackle fundamental ideas about stakeholders, social responsibility, and performance.

A Feminist Reinterpretation of The Stakeholder Concept

Stakeholder theory has become one of the most important developments in the field of business ethics. While this concept has evolved and gained prominence as a method of integrating ethics into the basic purposes and strategic objectives of the firm, the authors argue that stakeholder theory has retained certain “masculinist†assumptions from the wider business literature that limit its usefulness. The resources of feminist thought, specifically the work of Carol Gilligan, provide a means of reinterpreting the stakeholder concept in a way that overcomes many of the existing limitations. This reading provides a different understanding of the identity and meaning of the firm, specifically in terms of its relationship to stakeholder groups and what it means for a firm to succeed. The alternatives proposed also converge with recent trends in the wider management literature and provide practical guidance for firms which face a myriad of challenges in the increasingly complex and global marketplace.

Business Ethics: The State of the Art

The purpose of this paper is to give an account of some of the current areas of scholarship in business ethics and to suggest how these areas may be relevant for scholars working in other business disciplines. We endeavor to paint a picture of a healthy discipline full of controversy, rich intellectual discussions, and the beginnings of several research traditions. To begin, we examine how it is common practice to think of ‘business’ and ‘ethics’ as separate entities, and suggest how such a ‘separation thesis’ can be used to diagnose problems in a host of business disciplines. We next examine the literature on corporate agency and responsibility that questions whether or not a corporation can be said to be normally accountable, in the same way that individual moral agents can be held accountable, and we look at an emerging research tradition of ‘stakeholder theory’ that cuts across the disciplines of business. We then explore two contemporary issues in business ethics: (1) International Business Ethics; and, (2) Environmental Ethics and Business, and we conclude with suggestions for some additional research questions.

A Names-and-Faces Approach to Stakeholder Management: How Focusing on Stakeholders as Individuals Can Bring Ethics and Entrepreneurial Strategy Together

Just as the ideas of stakeholder theory, stakeholder management, or stakeholder capitalism approach acceptance as a mainstream core idea in management theory, the authors want to suggest a somewhat radical rethinking of it. They believe that in almost all of its incarnations, stakeholder theory merely recapitulates some rather standard business assumptions. As a result, they believe that two problems are perpetuated—the separation of ethics and value creation and the overemphasis of stakeholder roles rather than relationships between stakeholders as real people with names and faces. In this article, the authors propose that by adopting a view of stakeholders as real people with names and faces, they can reinvigorate stakeholder research and focus their efforts on the neglected challenge of understanding how collections of idiosyncratic individuals can work together to create value in entrepreneurial firms in ways that benefit all those who are affected.

A New Approach to CSR: Company Stakeholder Responsibility

Assume that the CEO of Firm A is asked the following: ‘Well, I know that your company makes products that consumers like, and that those products make their lives better. And I know that suppliers want to do business with your company because they benefit from this business relationship. I also know that employees really want to work for your company, and are satisfied with their remuneration and professional development. And, let’s not forget that you’re a good citizen in the communities where you are located;2 among other things, you pay taxes on the profits you make. You compete hard but fairly. You also make an attractive return on capital for shareholders and other financiers. However, are you socially responsible?’

Business Ethics at the Millennium

Business ethics, as a discipline, appears to be at a crossroads. Down one avenue lies more of the same: mostly philosophers taking what they know of ethics and ethical theory and applying it to business. There is a long tradition of scholars working in the area known as “business and society” or “social issues in management.” Most of these scholars are trained as social scientists and teach in business schools. Their raison d’etre has been admirable: trying to get executives and students of business to understand the social impacts of business and to see business in broad, societal terms.

Applying Stakeholder Theory in Sustainability Management Links, Similarities, Dissimilarities, and a Conceptual Framework

This essay examines links, similarities, and dissimilarities between stakeholder theory and sustainability management. Based on the analysis a conceptual framework is developed to increase the applicability and the application of stakeholder theory in sustainability management. Concluding from the analysis, we identify three challenges of managing stakeholder relationships for sustainability: strengthening the particular sustainability interests of stakeholders, creating mutual sustainability interests based on these particular interest, and empowering stakeholders to act as intermediaries for nature and sustainable development. To address these challenges three interrelated mechanisms are suggested: education, regulation, and sustainability-based value creation for stakeholders.

Special Topic: Democracy in and Around Organizations Is organizational democracy worth the effort?

Executive Overview Organizational democracy is frequently associated with increased employee involvement and satisfaction, higher levels of innovation, increased stakeholder commitment, and, ultimately, enhanced organizational performance. However, democratic processes can also absorb significant time and other organizational resources and bog down decisions, which may lead to reduced efficiency. This article summarizes the pros and cons of organizational democracy. It also introduces and integrates ideas from the three other articles in this special forum. In the end, we conclude that although the economic arguments for organizational democracy may be mixed, increased stakeholder participation in value creation and organizational governance can benefit both society and corporations. In fact, the corporation itself may be envisioned as a system of self-governance and the voluntary cooperation of stakeholders.