Simone de Colle

Stakeholder Theory: Stakeholder theory and corporate social responsibility

This chapter focuses on the connections between stakeholder theory and the corporate social responsibility (CSR) literature. After more than half a century of research and debate, there is not a single widely accepted definition of CSR. Researchers in the field of CSR have claimed that “the phrase ‘corporate social responsibility’ has been used in so many different contexts that it has lost all meaning” (Sethi 1975: 58). There are many different ideas, concepts, and practical techniques that have been developed under the umbrella of CSR research, including corporate social performance (Carroll 1979; Wartick and Cochran 1985; Wood 1991); corporate social responsiveness (Ackerman 1975; Ackerman and Bauer 1976; Sethi 1975); corporate citizenship (Wood and Logsdon 2001; Waddock 2004); corporate governance (Jones 1980; Freeman and Evan 1990; Evan and Freeman 1993; Sacconi 2006); corporate accountability (Zadek, Pruzan, and Evans 1997); sustainability , triple bottom line (Elkington 1994); and corporate social entrepreneurship (Austin, Stevenson, and Wei-Skillern 2006). All these are different nuances of the CSR concept that have been developed in the last fifty years – and beyond. Each of these diverse efforts shares a common aim in the attempt to broaden the obligations of firms to include more than financial considerations. This literature wrestles with and around questions of the broader purpose of the firm and how it can deliver on those goals.

When David Beats Goliath: Two Case-Studies in the Brewery Sector

We analyze two exceptional episodes of two multinational breweries who, independently from each other, decided to close a small niche brewery in a small town, namely Pedavena in Italy (part of the Heineken group) and Hoegaarden in Belgium (part of the InBev group). In both cases, the initial decision of plant closing was ultimately reversed through actions supported by an alliance of stakeholders. We develop and apply three different conceptual lenses to analyze the cases—described as Amoral Managerial (Model 0); Applied Business Ethics (Model I) and Bounded Business Ethics (Model II), respectively—showing how with the integration of stakeholder theory in business ethics research (Model II) we can enrich our understanding of the implications of stakeholder engagement in the value creation process that can be otherwise denied (Model 0) or overlooked (Model I). Our two cases also show that when managers are missing opportunities for value creation, or destroying elements of the value creation process, stakeholder alliances can repair such a stakeholder equilibration failure.

Stakeholder Theory: The development of stakeholder theory: a brief history

The purpose of this chapter is to trace the development of what has come to be known as “stakeholder theory.” We intend to accomplish this in what is perhaps an unusual manner. To begin we go back to Freemans original book and retell the story, told there, of the origins of the idea of stakeholders. We then suggest a number of additions and revisions that have been made to this history in the literature of the last twenty-five years. We move to what could be called “autobiographical” or “idiosyncratic” accounts of the development of stakeholder theory, mostly from the point of view of one of the authors, Freeman. We do this because we want to illustrate a philosophical point about the general issue of “theory development” and the importance of a role for “the author.” There are many different versions of “stakeholder theory” and we do not wish to try to synthesize all of them into something approximating “the correct version.” A viable social science has an important place for what we might call “the author.” To claim that “the author” has such a role in the development of management theory is neither to promote the self-importance of particular individuals nor to deny the role of intersubjective agreement that is so vital in science. Rather it is to claim that contextual factors and serendipity can be crucial in the process of theory development. Finally, we give an assessment of Freemans 1984 book.

Stakeholder Theory: Stakeholder theory and capitalism

We live in the age of markets. While they have been around for thousands of years, we are just beginning to understand their power for organizing society and creating value. In the last two hundred years markets have unleashed a tremendous amount of innovation and progress in the West. The industrial revolution, the rise of consumerism, and the dawn of the global marketplace have each in their own way made life better for millions of people. Many of us now know comforts, skills, and technologies that our ancestors could only dream of. Alongside these great strides forward are a set of deeply troubling issues. Capitalism, understood in the sense of “how markets work,” has also notoriously increased the divide between rich and poor, both within and across nations. We have become blind to some of the consequences of our actions that are harmful to others, such as environmental degradation, dominance of less privileged groups, and the inequitable distribution of opportunities. The seeds from these deeply troubling issues are beginning to germinate. Global warming, global financial crises, and global terrorism threaten to destabilize our world. It is more imperative than ever to study carefully and understand the power of markets and capitalism, and begin the construction of a new narrative about how capitalism can be a force for good in the world.

Stakeholder Theory: The problems that stakeholder theory tries to solve

We begin this chapter by outlining the problems that stakeholder theory was originally conceptualized to solve and the “basic mechanics” that we believe underlie the development of the theory during the last thirty years. We turn in the next sections to the arguments of Milton Friedman, Michael Jensen, Michael Porter, and Oliver Williamson, often cited as opponents of stakeholder theory, and suggest that all are compatible with the main ideas of stakeholder theory. We highlight what we also take to be key differences between stakeholder theory and these largely economic approaches to business. We suggest that while these approaches are compatible with stakeholder theory, it makes more sense to return to the very roots of capitalism, the theory of entrepreneurship. We suggest how stakeholder theory needs to be seen as a theory about how business actually does and can work. We make an explicit tie to the theory of entrepreneurship and outline the basics of the stakeholder mindset. Stakeholder theory: the basic mechanics Many have argued that the business world of the twenty-first century has undergone dramatic change. The rise of globalization, the dominance of information technology, the liberalization of states, especially the demise of centralized state planning and ownership of industry, and increased societal awareness of the impact of business on communities and nations have all been suggested as reasons to revise our understanding of business.

Stakeholder Theory by R. Edward Freeman

The stakeholder perspective is an alternative way of understanding how companies and people create value and trade with each other. Freeman, Harrison and Zyglidopoulos discuss the foundation concepts and implementation of stakeholder management as well as the advantages this approach provides to firms and their managers. They present a number of tools that managers can use to implement stakeholder thinking, better understand stakeholders and create value with and for them. The Element concludes by discussing how managers can create stakeholder oriented control systems and by examining some of the important stakeholder-related issues that are worthy of future scholarly and managerial attention.

Stakeholder Theory: Contents

The stakeholder perspective is an alternative way of understanding how companies and people create value and trade with each other. Freeman, Harrison and Zyglidopoulos discuss the foundation concepts and implementation of stakeholder management as well as the advantages this approach provides to firms and their managers. They present a number of tools that managers can use to implement stakeholder thinking, better understand stakeholders and create value with and for them. The Element concludes by discussing how managers can create stakeholder oriented control systems and by examining some of the important stakeholder-related issues that are worthy of future scholarly and managerial attention.

Stakeholder Theory: The genesis of stakeholder theory

The stakeholder perspective is an alternative way of understanding how companies and people create value and trade with each other. Freeman, Harrison and Zyglidopoulos discuss the foundation concepts and implementation of stakeholder management as well as the advantages this approach provides to firms and their managers. They present a number of tools that managers can use to implement stakeholder thinking, better understand stakeholders and create value with and for them. The Element concludes by discussing how managers can create stakeholder oriented control systems and by examining some of the important stakeholder-related issues that are worthy of future scholarly and managerial attention.

Stakeholder Theory: Stakeholder theory: some future possibilities

The stakeholder perspective is an alternative way of understanding how companies and people create value and trade with each other. Freeman, Harrison and Zyglidopoulos discuss the foundation concepts and implementation of stakeholder management as well as the advantages this approach provides to firms and their managers. They present a number of tools that managers can use to implement stakeholder thinking, better understand stakeholders and create value with and for them. The Element concludes by discussing how managers can create stakeholder oriented control systems and by examining some of the important stakeholder-related issues that are worthy of future scholarly and managerial attention.

Stakeholder Theory: Stakeholder theory in finance, accounting, management, and marketing

Stakeholder theory is beginning to have a greater reach in the academic literature on business. The purpose of this chapter is to examine how it has been applied in the four major business disciplines – finance, accounting, management, and marketing (economics was addressed earlier, in Chapter 1, and strategic management in Chapter 4). This chapter suggests that researchers have selected those portions of the theory that are most applicable to the questions they are trying to answer. Integration of stakeholder concepts with the theories of their own discipline has occurred; however, this integration has not, unfortunately, contributed much to the core stakeholder literature. In other words, stakeholder theory has informed the business disciplines, but the disciplines have done little to inform stakeholder theory. Perhaps another way to say this is that stakeholder theorists have not paid adequate attention to the disciplines. We offer the ideas in this chapter as a beginning to bridging this disciplinary gap. There are opportunities for scholars in all the business disciplines to advance both stakeholder theory and practice. In the next section we shall briefly discuss the emergence of the primary business disciplines. We shall also explain how we have defined the content of each discipline for the purposes of this analysis. Each of the four disciplines has a subsequent section devoted to it.