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The Business Roundtable, a coalition of America’s leading corporate executives, created a firestorm with its August 19 announcement calling for corporations to create value for all stakeholders rather than simply maximizing value for their shareholders.
A debate ensued over whether Milton Friedman was right or wrong in 1970 when he famously declared that the social responsibility of business is to increase its profits.
Some commentators accused the executives of abandoning shareholders; others decried that they were “green-washing” or “purpose-washing:” simply making themselves look good without authentic action.….Continue reading…
Source: Why the Debate Over Stakeholder Value Versus Shareholder Value Is All Wrong | Inc.com
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The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory.
The stakeholder view of strategy integrates a resource-based view and a market-based view, and adds a socio-political level. One common version of stakeholder theory seeks to define the specific stakeholders of a company (the normative theory of stakeholder identification) and then examine the conditions under which managers treat these parties as stakeholders (the descriptive theory of stakeholder salience).
In fields such as law, management, and human resources, stakeholder theory succeeded in challenging the usual analysis frameworks, by suggesting that stakeholders’ needs should be put at the beginning of any action. Some authors, such as Geoffroy Murat, tried to apply stakeholder’s theory to irregular warfare.
The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory.
The stakeholder view of strategy integrates a resource-based view and a market-based view, and adds a socio-political level. One common version of stakeholder theory seeks to define the specific stakeholders of a company (the normative theory of stakeholder identification) and then examine the conditions under which managers treat these parties as stakeholders (the descriptive theory of stakeholder salience).
In fields such as law, management, and human resources, stakeholder theory succeeded in challenging the usual analysis frameworks, by suggesting that stakeholders’ needs should be put at the beginning of any action. Some authors, such as Geoffroy Murat, tried to apply stakeholder’s theory to irregular warfare.
Numerous articles and books written on stakeholder theory generally identify Freeman as the “father of stakeholder theory”. Freeman’s Strategic Management: A Stakeholder Approach (1984) is widely cited in the field as being the foundation of stakeholder theory, although Freeman himself refers to several bodies of literature used in the development of his approach, including strategic management, corporate planning, systems theory, organization theory, and corporate social responsibility.
A related field of research examines the concept of stakeholders and stakeholder salience, or the importance of various stakeholder groups to a specific firm. An anticipation of such concepts, as part of Corporate Social Responsibility, appears in a publication that appeared in 1968 by the Italian economist Giancarlo Pallavicini, creator of “the decomposition method of the parameters” to calculate the results are not directly economic activity of enterprise, regarding ethical issues, moral, social, cultural and environmental.
Stakeholder theory has seen growing uptake in higher education in the late 20th and early 21st centuries. One influential definition defines a stakeholder in the context of higher education as anyone with a legitimate interest in education who thereby acquires a right to intervene. Studies of higher education first began to recognize students as stakeholders in 1975.
External stakeholders may include employers. In Europe, the rise of stakeholder regimes has arisen from the shift of higher education from a government-run bureaucracy to modern systems in which the government’s role involves more monitoring than direct control.
Economist and university professor Danuše Nerudová, a candidate in the 2023 Czech presidential election, is a proponent of stakeholder capitalism where “questions of sustainability and global politics, as well as the development of domestic societies” will have increased relevance for company and state decision making.
Researcher Benjamin Tallis has examined whether a move from neoliberalism to stakeholder capitalism, “which implies a different role for the state as well as a focus on creating more cohesive and resilient societies”, could affect public optimism in the Czech Republic.
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