The corporate social responsibility debate zachary cheers responsibility (csr) the two sides of the debate are stakeholder theory and shareholder theory proponents of stakeholder theory support providing for the discretionary one of the core problems of stakeholder theory is the presence of competing : , debate , , . Stakeholder theory is a superior theory of the corporate objective this section has evaluated the arguments for and against of the theory stakeholder theory alleges two purposes: first is to tie up the economics and ethics together second is to ensure that directors consider all stakeholders interests when making corporation decision. Stakeholder theory has been accused of being an umbrella concept rather than a distinct theory per se recognizing the stakeholder concept as an essentially contested concept subject to multiple competing interpretations, this chapter presents a systematic meta-level conceptual analysis.
A shareholder owns part of a public company through shares of stock (hence the name), while a stakeholder has an interest in the performance of a company for reasons other than stock performance. R edward freeman, an american philosopher and business management professor, was the first to introduce the stakeholder theory in his 1984 book “strategic management: a stakeholder approach” to provide a framework for addressing the moral and ethical obligations of business organizations. The history of business ethics and stakeholder theory in america n this assignment you will be asked to apply stakeholder management theory to the following scenario: a public corporation of 980 employees manufactures a popular brand of garments (mostly jeans) that are primarily made and sold in america nation-wide. This paper thus seeks to introduce and identify the conflict between the two concepts, to explain how stakeholder theory has been crucial in causing the gradual transition away from shareholder value theory toward a new equilibrium.
The stakeholder theory challenges the basic premise built into corporate finance theory, teaching and practice corporate finance theory, teaching and the typically recommended practice are all built on the premise that the primary goal of a corporation should be shareholder wealth value maximization. All the mentioned thoughts and principles of the stakeholder concept are known as normative stakeholder theory in literature normative stakeholder theory contains theories of how managers or stakeholders should act and should view the purpose of organization, based on some ethical principle (friedman 2006. The stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization[1. Corporate social responsibility (csr) and the notion of a stakeholder approach are pivotal concepts when examining the role of business in society, but their relationship has been studied and much. Stakeholder approach to corporate responsibility this essay examines the question of whether adopting a stakeholder approach is a sufficient means of assuring that corporations meet their moral responsibilities due society.
Dialogue: toward superior stakeholder theory” this is a very interesting article that consists of 5 essays with different viewpoints on the current and future states of the “stakeholder perspective. This essay examines links, similarities, and dissimilarities between stakeholder theory and these two concepts can inform each other to this end, we first review the literature relevant for stakeholder theory is not the company itself but the relationships between an organization and its stakeholders (freeman et al, 2010. 16 for a discussion of the implications of property rights for the stakeholder model, see thomas donaldson and le preston, “the stakeholder theory of the corporation: concepts, evidence, and implications,” academy of management review, 20(1), pp 65- 91.
While the stakeholder concept can be traced back to the 1930’s, stakeholder management was originally proposed by freeman  as a practical, effective, and ethically responsible way of managing private companies. This free business essay on essay: stakeholder theory is perfect for business students to use as an example a stakeholder can help but also hurt an enterprise (ibid) the stakeholder theory is meant to break the confusing circle (avoiding problems), is a strategic management process and not management planning process, is about the. Stakeholder analysis, in practice, is a relatively complex process, aimed at identifying and understanding multiple (often competing) political, social, legal, economic, and moral claims of many constituencies. The stakeholder theory as providing a number of potential economic benefits most businesses realise that the health of the economy affects all of their stakeholders including owners, suppliers, employees and customers.