A stakeholder approach, originally published in 1984 and reprinted 2010 by. Wernerfelt, 1984 to expand the concept of sustainable competitive advantage. As clearly expressed in the title of the book, one central purpose of stakeholder theory has been to enable managers to understand stakeholders and strategically manage them. Business executives manage stakeholders freeman, 1984, and the manner in which those stakeholders are managed influences the value a business firm creates or destroys. This theory emphasises the importance of the involvement of stakeholders in the business in order to create value parmar et al, 2010.
Edward freeman published his landmark book, strategic management. Unlike the shareholder approach, the stakeholder approach emphasizes responsibility over. The stakeholder approach part i strategic management. A stakeholder approach was first published in 1984 as a part of the pitman series in business and public policy. It is perhaps not surprising that a theory as popular as stakeholder theory should be used in different. Rather the argument recognizes that the stakeholder framework is largely managerial in the sense that donaldson and preston have pointed out. Edward freemans foundational work continues to inspire scholars and. 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. Stakeholder theory by freeman 1984 provides us with a framework that can be used to map out the stakeholders of all different types of businesses.
Darden graduate school of business administration university of virginia working paper no. Analysing instrumental stakeholder theory philosophy essay. A stakeholder approach 1984 freemans book helped add the concept of stakeholders to management theory, sought to develop an approach that was both profitable and socially responsible, and offered various arguments for the claim that a. A stakeholder approach to corporate social responsibility. A stakeholder approach 1984, about a dozen books and more than 100 articles with primary emphasis on the stakeholder concept have ap peared. The stakeholder approach starts by looking at various groups to which the organization has an obligation to. Secondly, compare and contrast of shareholder and stakeholder approaches is made. Whilst the term stakeholder was first documented in the 1960s, the theoretical approach was in the main developed and brought forward by edward freeman 1984 in the 1980s. A stakeholder approach 1984, the stakeholder theory originated by r. Strengths and limitations of stakeholder engagement methods engaging stakeholders to identify and prioritize future research needs your browsing activity is empty. Widely acknowledged as a world leader in business ethics and strategic management. It was written as a practical guide for managers and. Extended stakeholder theory published laszlo zsolnai.
A stakeholder approach, cambridge university press, new york. Stakeholder theory slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. This is only a partial representation of ed freemans published works on stakeholder theory. In the intervening years, the literature on stakeholder theory has become vast and diverse. Chapter two, the stakeholder concept and strategic management, introduces the notion that organizations have stakeholders and traces the history of this idea through several research areas of management thought, most notably corporate planning, organization theory, social responsibility, systems theory and strategic management.
That view is in opposition to the longheld shareholder theory proposed by economist milton friedman that in capitalism, the only stakeholders a company should care about are its shareholders and thus, its bottom line. Strengths and limitations of stakeholder engagement methods. A case study of siemens violation of business ethics in. This is a same conclusion given by the shareholder primacy, but reaching that final point through a different approach. The extended stakeholder approach aims to transcend this position and sees social responsibility as a nonreciprocal duty to guarding beings. These ideas are central to the esei approach to stakeholder engagement. A stakeholder approach, a work that set the agenda for what we now call stakeholder theory. Widely acknowledged as a world leader in business ethics and strategic management, r. 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. Stakeholder theory and the corporate objective revisited. In this article, we try to outline this development by carrying out a metaanalysis within the leading project management journals.
In this report, purposes of corporations are investigated under two different approaches on corporate value maximization. Using a different approach, initiatives at one health care organization, using value stream analysis and production system methods, improved care by. In this article, rather than building on the discussion from a theoretical point of view, a radically different and innovative approach is chosen. A challenge for empirical research abstract stakeholder theory is one of the most influential theories in business ethics. A stakeholder approach, which has been out of print for a decade, there is a dearth of books that provide a detailed defense of the actual theory behind stakeholder theory. A service of the national library of medicine, national institutes of health. Stakeholder theory is a specific approach to recognising and dealing with stakeholders, based on the concept of stakeholder developed by ed freeman in his books strategic management. Werhane, ruffin professor of business ethics and senior fellow of the olsson center for applied ethics, holds a joint appointment at darden and at depaul university, where she is wicklander. The purpose of this paper is to revisit the development of the stakeholder management approach developed in strategic management. At least since the publication of the monumental strategic management. For a discussion of alternative ethical approaches to governance questions, see generally mark a. Subsequently, some advocates have moved a bit too quickly and without proper definition or argument.
Stakeholder theory and the corporate objective revisited organization science 153, pp. Many different philosophical approaches have been cited in this discussion, especially. A case study of labor management relations at general motors. A stakeholder approach pitman series in business and public policy freeman, r. Imperfections and shortcomings of the stakeholder models. Edward freeman, in the now classic text strategic management. Those other agencies and other public and private stakeholders often assert. A stakeholder approach published by pitman publishing in 1984. After 25 years from its inception by freeman in 1984, the stakeholder approach enjoys support from a growing community of researchers and practitioners. Evans brako ntiamoah, priscilla oforiwaa egyiri, michael kwamega. Corporate social responsibility awareness, firm commitment and organizational performance. One of the most important contributors to stakeholder theory is r. Stakeholder theory is unquestionably the most popular framework for discussing business ethics.
The stakeholder perspective is useful in that it describes what managers actually do. This landmark book takes a retrospective look at the most important and influential works in the study of stakeholders since freemans 1984 publication, strategic management. The agency established in 1984 what is now called the risk assessment forum. However, over the years, critics have attacked the vagueness and ambiguity of stakeholder theory. Engaging patients, families, and communities best care at lower. Towards a stakeholder theory of strategic management joseph t. Edward freemans stakeholder theory holds that a companys stakeholders include just about anyone affected by the company and its workings. Milton friedman 1982 edward freeman 1984 the only group with a moral claim on the corporation is the people who own shares of the stock shareholders many groups have a moral claim on the corporation that derives from the corporations potential. Its publication proved to be a landmark moment in the development of stakeholder theory. Assessing freemans stakeholder theory springerlink.
A stakeholder approach to strategic management, 1984 source. The aim of this research is to promote the notion of stakeholder management by. A case study of siemens violation of business ethics in argentine based on stakeholder theory. Shareholder and stakeholder approaches essay sample.
A stakeholder approach to corporate social responsibility provides a comprehensive collection of cuttingedge theories and research that can lead to a more multifaceted understanding of corporate social responsibility in its various forms, the pressures and conflicts that result from these different understandings, and some potential solutions. In the 1990s, the fourstep approach outlined in the red book was adapted to. Distinctions in descriptive and instrumental stakeholder theory. Edward freeman originally detailed the stakeholder theory of organizational management and business ethics that addresses morals and values in. An obvious play on the word stockholder, the approach sought to broaden the concept of strategic management. Since 1984 academic interest in a stakeholder approach has both grown and broadened. They have exceeded freemans intentions which are more libertarian. A stakeholder approach pitman series in business and public policy. Distinctions in descriptive and instrumental stakeholder. Towards a stakeholder theory of strategic management. Unlike the stakeholder theory, the shareholder primacy does not take nonshareholder. Save up to 80% by choosing the etextbook option for isbn.
A stakeholder approach brought stakeholder theory into the mainstream of management literature. We found that stakeholder theory is predominantly fed by articles from angloamerican countries and applied in. Freeman has engrossed much of the business ethics literature. Edward freeman originally detailed the stakeholder theory of organizational management and business ethics that addresses morals and values in managing an organization. Assessing freemans stakeholder theory 403 says nothing about treating all stakeholders equally, nor does it suggest even remotely that managers should take from one stakeholder group and give to another. First notable publication on the stakeholder theory.
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