Stakeholder theory

"Lack of specificity around stakeholder identity remains a serious obstacle to the further development of stakeholder theory and its adoption in actual practice by business managers. Nowhere is this shortcoming more evident than in stakeholder theory's treatment of the constituency known as 'community."

"The stakeholder concept was originally defined as "those groups without whose support the organization would cease to exist." The list of stakeholders originally included shareowners, employees, customers, suppliers, lenders and society. Stemming from the work of Igor Ansoff and Robert Stewart (in the planning department at Lockheed) and, later Marion Doscher and Stewart at SRI, the original approach served an important information function in the SRI corporate planning."

"Freeman is the acknowledged father of the stakeholder approach. His Strategic Management: a Stakeholder Approach (1984) introduced the concept of stakeholders, all of those individuals or groups other than shareholders (or owners) who have a stake in the particular decision or action of companies. The book proved to be a landmark in the development of stakeholder theory, a theory of management and business ethics that emphasises morality and ethicality in managing organisations. This theory was a departure from the dominant Anglo-Saxon approach that grants priority to shareholders and independence of management. Nowadays, the stakeholder approach is mentioned in virtually every publication on corporate governance and corporate social responsibility. By interacting with their stakeholders and societal context, organisations are able to establish their (social) responsibility system, enforced in part through laws and regulations but also increasingly voluntarily through company codes and business principles. The stakeholder theory is applied within various scientific disciplines ranging from business to law, from politics to health."

"Stakeholder theory regards the firm as a nexus of stakeholders, commonly defined as groups or individuals who can affect or are affected by the achievement of the firm's goals (Freeman 1984). Depending on the ground for examining a firm's stakeholders, we can differentiate three approaches (Jones 1995):"

"Looking at the business corporation through something other than the eyes of its equity holders has inspired great efforts to translate that intuitive appeal into a theory... The promise of stakeholder theory to offer a cogent alternative to the economic account of the firm, however, is impeded by a set of assumptions designed to accommodate economic considerations."