Stakeholder theory is widely recognized as a management theory, yet very little research has considered its implications for individual managerial decision-making. In the two studies reported here, we used stakeholder theory to examine managerial decisions about balancing stakeholder interests. Results of Study 1 suggest that indivisible resources and unequal levels of stakeholder saliency constrain managers’ efforts to balance stakeholder interests. Resource divisibility also influenced whether managers used a within-decision or an across-decision approach to balance stakeholder interests. In Study 2 we (...) examined instrumental and normative implications of these two approaches. We conclude by considering the contributions of this research. (shrink)

The question of whether, and to what extent, business managers have obligations to stakeholders has been the principal theme in much of recent business ethics literature. The question of whether shareholders have obligations to stakeholders, however, has not been addressed sufficiently. I provide some needed attention to this matter by examining the positions of shareholders in the contemporary world of investing. Their positions are considerably different than that often envisioned by business ethicists and economists where shareholders determine the directions of (...) corporate activities through their voting decisions. Typical contemporary investors rarely control corporate activities. If they own corporate securities directly, generally they own too small an interest to exercise control. And, in most cases, they do not even own corporate securities directly, but, rather, own shares in funds. Because of the positions of shareholders today, it is highly questionable whether most have obligations to stakeholders. This has a significant implication for business managers. Whether or not shareholders have obligations to stakeholders, business managers have a greater obligation to educate shareholders about how corporate activities affect stakeholders. I provide a justification for that obligation and comment on how business managers might begin to fulfill it. (shrink)

The normative foundations of the investor centered model of corporate governance, represented in mainstream economics by the nexus-of-contracts view of the firm, have come under attack, mainly by proponents of normative stakeholder theory. We argue that the nexusof- contracts view is static and limited due to its assumption of price-output certainty. We attempt a synthesis of the nexus-of-contracts and the Knightian views, which provides novel insights into the normative adequacy of the investor-centered firm. Implications for scholarship and management practice follow (...) from our discussion. (shrink)

Within stakeholder literature, much attention has been given to which stakeholders "really count." This article strives to explain why organizational theorists should abandon the pursuit of "Who and What Really Counts" to challenge the assumption of a managerial perspective that defines stakeholder legitimacy. Reflecting on the paucity of employee rights and protections in marginalized work environments, I argue that as organizational researchers, we must recognize and take responsibility for the impact of our research models and visions. By confronting and rethinking (...) the foundational assumptions of stakeholder theory, business and society scholars can identify and pursue research questions that more effectively address contemporary social challenges. (shrink)

Just as Michael Porter's five forces provided a practical analytical tool for describing the forces that shape competitive strategy, so business ethicists ought to provide business leaders with a workable framework for understanding the sources of ethical obligations. The forces that shape competitive strategy vary according to time and industry, but are anchored in an ultimate criteria of profitability. Similarily, ethics can use a set of analytical categories that identify the relevant forces to business ethics on the basis of relationality.This (...) paper first argues that relationality based on naturalism is the primary, plausible value for ethics. Second, it adapts a tripartite dialectic from scholars William Frederick and Michael Novak to describe the relational categories with which business must contend. Third, it uses these forces in a way similar to Porter's competitive forces to offer an analytical language familiar to managers in order to characterize business ethics. (shrink)