This article summarizes the development of the stakeholder concept in the last decade. The academic debate has been dominated over the last ten years by the managerial version of the stakeholder concept. The case of Shell in Ogoniland is elaborated to demonstrate that the managerial version does not pay sufficient respect to other interpretations of the concept. The article criticizes this dominant interpretation and argues for the need of an ongoing — academic and practical — debate on organizing and ethics. (...) An ongoing "organizational stakeholder debate" is required. Social and ethical accounting, auditing, and reporting can be seen as one way to operationalize this notion of the "organizational debate", if it addresses the creation and diversity of moral meaning in the context of organizations. (shrink)

This article explains problems and opportunities created by standardized ethics initiatives (e.g., the UN Global Compact, the Global Reporting Initiative, and SA 8000) from the perspective of stakeholder theory. First, we outline differences and commonalities among currently existing initiatives and thus generate a common ground for our discussion. Second, based on these remarks, we critically evaluate standardized ethics initiatives by drawing on descriptive, instrumental, and normative stakeholder theory. In doing so, we explain why these standards are helpful tools when it (...) comes to ‘managing’ stakeholder relations but also face considerable limitations that can eventually hamper their successful expansion. We suspect that this discussion is necessary to conduct meaningful empirical research in the future and also to provide managers with a more clear-cut picture about a successful application of such initiatives. Third, we outline possible ways to cope with the identified problems and thus demonstrate how standard-setting institutions can improve the initiatives they offer. (shrink)

As corporate managers interact with nonshareholder stakeholders, potential tradeoffs emerge and questions arise as to how these interactions impact shareholder value. We argue that this shareholder—stakeholder debate is an important issue within the overall corporate governance and corporate policy domain and examine one such stakeholder group - employees - by studying labor-friendly corporate practices. We find that announcements of labor-friendly policies are associated with positive abnormal stock returns. Labor-friendly firms also outperform otherwise similar firms, both in terms of long-run stock (...) market returns and operating results. In addition, we find that the probability and benefits of labor-friendliness increase with the demand for highly skilled labor. Our analysis of excess executive compensation suggests that top management derives no pecuniary benefits from labor-friendly practices. We interpret our results as consistent with a genuine concern for employees translating into higher productivity and profitability, which in turn facilitate value creation. It appears that the benefits of labor-friendly practices significantly outweigh the costs and that what is good for employees is good for shareholders. (shrink)