However, a coherent stakeholder theory is difficult to identify because various academic disciplines have produced several versions of stakeholder theory roberts and mahoney, 2004. The two versions of stakeholder theory are normative theory and an empirical theory of management. The purpose of this chapter is to outline the development of the idea of stakeholder management as it has come to be applied in strategic management. Edward freeman published his landmark book strategic management.
One focal point in this movement was the publication of r. What to know about stakeholder theory amelia marlowe 2. The basic idea is that businesses, and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers or shareholders. A stakeholder approach pitman series in business and public policy freeman, r. Stakeholder mapping is the process of creating such pictures to clarify the position of the stakeholders of the organization. Edward freeman presents an overview of stakeholder theory and its relation to business, value creation, longterm success and trust in business. Resource dependence deals with how organizations cope with these dependence relationships in. According to freeman and reed 1983 stakeholder theory is that. Nonetheless, his classic book, strategic management. The theory that youve just read about is significantly different from the stockholder theory that we saw from friedman. Exploring stakeholder management in nonprofit organizations. Such is the role of what has come to be called stakeholder theory, and its relationship to our understanding of business activity. Have you ever wondered why businesses care to do so much for their consumers. On the 25th anniversary of publication, this reissue provides a new generation of scholars and students with access to r.
A stakeholder approach is a foundational work in the field of business ethics. A stakeholder approach to strategic management article pdf available in ssrn electronic journal january 2001 with 146,550 reads how we measure reads. Download it once and read it on your kindle device, pc, phones or tablets. Abstract after 25 years from its inception by freeman in 1984, the stakeholder approach enjoys support from a growing community of. Edward freeman published his landmark book, strategic management. Edward freeman originally detailed the stakeholder theory of organizational management and business ethics that addresses morals and values in. A stakeholder approach was first published in 1984 as a part of the pitman series in business and public policy. A stakeholder approach 1984, the stakeholder theory originated by r. According to freeman and reed 1983, stakeholder theory is that any group or individuals who can affect by the achievements of the organizations objectives, or it is affected by the achievements of the organizations objectives rankin et al. Stakeholder management in the local government decision. This book has served to define a starting point for subsequent scholars and executives and continues to inspire scholars and students concerned with a more practical view of how business. Edward freemans strategic management a stakeholder approach in 1984. This book examines this body of research and assesses its relevance for our understanding of modern business. At least since the publication of the monumental strategic management.
This is only a partial representation of ed freemans published works on stakeholder theory. A stakeholder approach was reprinted in 2010 by cambridge university press. It was in this environment that freeman 1984 suggested that managers apply a vocabulary based on the stakeholder concept. Up until now, stakeholder theory has focused primarily on forprofit enterprises, whereas literature on stakeholder theory from the perspective of nonprofit organizations is scant bryson, 2004b. Stakeholder management in the local government decisionmaking area importance of the resource for the organization, the more attached to this supplier the organization will be. We then proceed to define the basic ideas of managing for stakeholders and why it solves some of the problems of the dominant model. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory. Freeman 1984 defines a stakeholder as being any group or individual who can affect or is affected by the achievement of an organisations objectives, p. Fortunately, the recent article by donaldson and preston 1995 has added considerable coherence to the stakeholder concept as theory and has provided a taxonomy of stakeholder theory types. Jul 30, 2008 we then proceed to define the basic ideas of managing for stakeholders and why it solves some of the problems of the dominant model. This is based on the assumption that an organisations as well as individuals, possess.
It addresses morals and values in managing an organization, such as those related to corporate social responsibility. These important scandinavian contributions include the first publication and description of the expression stakeholder. The only detailed, comprehensive treatment of stakeholder theorythe most popular framework for discussions of business ethicscurrently in print examines stakeholder theory from the perspective of several fields of study, including strategic management, economics, moral and political philosophy, social psychology, and environmental ethics. Historically, and perhaps still in some quarters today, a common view is that businesses and business managers only responsibility is to maximise profits for the owners or stockholders of the business within the limits of the law. Stakeholder language has gained momentum across various academic fields in the last two decades. A stakeholder approach, a work that set the agenda for what we now call stakeholder theory. They have exceeded freemans intentions which are more libertarian and free. Sep 24, 2008 at least since the publication of the monumental strategic management. A stakeholder approach originally published in 1984 and reprinted by cambridge university press in 2010 identifies and models the groups which are stakeholders of a corporation. Mar 16, 2001 the purpose of this chapter is to outline the development of the idea of stakeholder management as it has come to be applied in strategic management. Of course, the stakeholder theory certainly involves more responsibilities than the shareholder theory.
We then suggest that traditionally the stakeholder approach to strategic management has several related characteristics that serve as. Download limit exceeded you have exceeded your daily download allowance. Resource dependence deals with how organizations cope with these dependence relationships in order to survive and retain their autonomy. Stakeholder theory the stakeholder concept freeman 1984 defines a stakeholder as any group or individual who can affect or is affected. Edward freeman born december 18, 1951 is an american philosopher and professor of business administration at the darden school of the university of virginia, particularly known for his work on stakeholder theory 1984 and on business ethics. Why do some people think his definition is controversial. The management that uses stakeholder theory is responsible for taking into account the. Building on the process work of ian mitroff and richard mason, and james emshoff for statements of. A stakeholder approach to strategic management by r.
It might be argued that the stakeholder theory is a better representation of the actual web of relationships that exist in any business interactions. A stakeholder approach 1984, about a dozen books and more than. A stakeholder approach, cambridge university press, new york. Give an example of a business in decline due to its ignoring one of its stakeholders. This book examines this body of research and assesses its relevance for our. Approach freeman, 1984, continues to be cited by numerous authors, as.
Some future directions, freeman2 spells out in greater detail the principles that stakeholders would adopt that, in turn, would generate the specific reforms he argues for. According to freeman and reed 1983 stakeholder theory is. We begin by developing a brief history of the concept. They have exceeded freemans intentions which are more libertarian.
Examining the role of external brand stakeholders a. The shareholders, in turn, would privately shoulder any social responsibility. Building on the process work of ian mitroff and richard mason, and james emshoff for statements of these views see mason and. Ed freemans 1984 award winning book, strategic management. Darden graduate school of business administration university.
Stakeholder theory the stakeholder concept freeman 1984 defines a stakeholder as any group or. Edward freeman originally detailed the stakeholder theory of organizational management and business ethics that addresses morals and values in managing an organization. Use features like bookmarks, note taking and highlighting while reading stakeholder theory. Since then, the literature on stakeholder theory in both business and ethics has become vast and diverse. Lets take a look at freemans thesis, and see just how different they are. Internal external stakeholder analysis, primary secondary stakeholder analysis, force field analysis, swot analysis and actor influence. When edward freeman first published his book about stakeholder theory in 1984, it. A stakeholder approach freeman, 1984 is widely described as the landmark contribution that helped to embed consideration to the concept of stakeholders. This book has served to define a starting point for subsequent scholars and executives and continues to inspire scholars and students concerned with a more practical view of how business and capitalism actually work. In the two studies reported here, we used stakeholder theory to examine managerial decisions about balancing stakeholder interests.
Since the 1980s stakeholder theory has developed the thesis that the organisation has a moral relationship with groups other than shareholders freeman, 1984. Assessing freemans stakeholder theory springerlink. While there have been many criticisms of the research in corporate social responsibility, perhaps the most troubling issue is the very nature of corporate social responsibility as if the concept were needed to augment the study of business policy. Amongst the generic methods that can be used to analyze stakeholders are. Stakeholder theory presentation linkedin slideshare. 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. Edward freeman, a stakeholder theory of the modern. The existing literature on stakeholder relationships in the nonprofit sector suffers from significant limitations. In the intervening years, the literature on stakeholder theory has become vast and diverse. Its publication proved to be a landmark moment in the development of stakeholder theory. The term stakeholder concept, however, is relatively vague and, thus, gives little direction to either the study or the practice of management. Stakeholder theory is widely recognized as a management theory, yet very little research has considered its implications for individual managerial decisionmaking. Taken together, these two articles stand as perhaps the most complete statement of a social contractbased stakeholder theory in the current literature.
Attributes of valuecreating stakeholder relationships. A dynamic perspective in freemans stakeholder model. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Stakeholder theory and the corporate objective revisited 366 organization science 153, pp. Brands with duplicitous transient and transcendent attributes push stakeholder analysis towards more figurative, tacit. Freeman has engrossed much of the business ethics literature. Edward freeman he began work on the stakeholder theory in 1984 freeman received a b. A stakeholder approach to strategy emerged in the mid1980s. Subsequently, some advocates have moved a bit too quickly and without proper definition or argument. Stakeholder theory and the corporate objective revisited. A stakeholder approach pitman series in business and public policy. In particular we pay attention to how using stakeholder as a basic unit of analysis makes it more difficult to ignore matters of ethics.
937 283 38 875 266 756 1004 1464 1494 802 516 1458 1480 949 986 849 797 321 837 618 234 616 299 842 1451 765 338 443 1189 958 155 1222 937 762 728 1245 306