The Stakeholder Approach Revisited

Idea Development of the term "stakeholder"

• Stakeholder "any group or individual that can affect or is affected by the achievement of a corporation's purpose"
• thus, managers need an "explicit strategy" to account with this group
• Executives find thinking of stakeholder relationships helpful to dealing with the types of change affecting their corporations

The Basic Argument for Stakeholder Theory in Business

• You have to take into account the effects of your actions on others and their potential effects on you. No matter what your purpose or orientation is
• Thus it is imperative that you understand stakeholder behaviors, values and backgrounds/contexts
• These ideas can be applied to rethink business functions, structures, and process and how strategic planning processes work to take these stakeholders into account

Implications:

• Freeman says we don't need a separate CSR approach as stakeholders are defined so widely
• Shareholders are stakeholders, they both have to move in the same general direction over time
• With changes brought on by globalization, information technology, and ethics scandals (Like banks and stuff) there is even more urgency to adopt the stakeholder approach

Freeman, R. (2004). The Stakeholder Approach Revisited. Zeitschrift Fuer Wirtschafts- Und Unternehmensethik, 5(3), 228-241.