Stakeholder theory has become a central issue in the literature on business ethics / business and society. There are, however, a number of problems with stakeholder theory as currently understood. Among these are: 1) the lack of a coherent justificatory framework, 2) the problem of adjudicating between stakeholders, and 3) the problem of stakeholder identification. In this essay, I propose that a possible source of obligations to stakeholders is the principle of fairness (or fair play) as discussed in the political (...) philosophic literature of Rawls, Simmons, and Cullity among others. The principle of fairness states that, “Whenever persons or groups of persons voluntarily accept the benefits of a mutually beneficial scheme of co-operation requiring sacrifice or contribution on the parts of the participants and there exists the possibility of free-riding, there exist obligations of fairness on the part of these persons or groups to co-operate in proportion to the benefits accepted.” In this essay I discuss the gaps in the current stakeholder literature, elucidate and defend a principle of fairness that fills the gap, compare the fairness model to other similar models of business ethics, and draw some conclusions for the future of stakeholder theory. (shrink)

Stakeholder theory has become one of the most important developments in the field of business ethics. While this concept has evolved and gained prominence as a method of integrating ethics into the basic purposes and strategic objectives of the firm, the authors argue that stakeholder theory has retained certain “masculinist” assumptions from the wider business literature that limit its usefulness. The resources of feminist thought, specifically the work of Carol Gilligan, provide a means of reinterpreting the stakeholder concept in a (...) way that overcomes many of the existing limitations. This reading provides a different understanding of the identity and meaning of the firm, specifically in terms of its relationship to stakeholder groups and what it means for a firm to succeed. The alternatives proposed also converge with recent trends in the wider management literature and provide practical guidance for firms which face a myriad of challenges in the increasingly complex and global marketplace. (shrink)

While stakeholder theory has traditionally considered organization’s interactions with stakeholders in terms of independent, dyadic relationships, recent scholarship has pointed to the fact that organizations exist within a complex network of intertwining relationships [e.g., Rowley, T. J.: 1997, The Academy of Management Review 22(4), 887–910]. However, further theoretical and empirical development of the interactions between stakeholders has been lacking. In this paper, we develop a framework for understanding and measuring the effects upon the organization of competing, complementary and cooperative stakeholder (...) interactions, which we refer to as stakeholder multiplicity. We draw upon three forms of fit (i.e. fit as matching, fit as moderation, and fit as gestalts; Venkatraman, N.: 1989) to develop a framework for understanding stakeholder multiplicity based upon the direction, strength, and synergies of the interacting claims. Additionally, we draw upon the theory of stakeholder identification and salience of Mitchell et al. (1997), which we argue provides a more relevant and significantly more illustrative explanation of the nature and effects of stakeholder interactions upon the organization than the network approach of Rowley (1997). Furthermore, we ground our framework through reference to three stakeholder groups (i.e. governments, customers, and employees) and the stakeholder issue of concern for the natural environment. We propose a hierarchy of the multiplicity strength of influence of these three stakeholder groups. Potential measurement and implications are discussed. (shrink)

Stakeholder literature has acknowledged the need to complement the extant theory on stakeholder management by more dynamic perspectives. This article makes use of the recent terminology of stakewatcher and stakeseeker to illustrate the dynamic aspect of stakeholder theory transposed in the graphical representation of Freeman’s stakeholder model. Presenting a few selected case studies, it applies the scheme on the concept of value responsibility chain; it exemplifies the role of stakeseekers in various forms of activism, from shareholders, NGOs and government, in (...) the stakeholder mobilisation process. This article clarifies how stakewatchers and stakeseekers can profoundly affect stakeholder salience, especially in crises. The transposition and integration of the dynamic aspect of stakeholder theory into the graphical representation strengthen the forceful pedagogical value of the Freeman’s stakeholder graphical model. (shrink)

This article furthers the argument for a stakeholder theory that integrates into managerial decision-making the relationship between business organizations and the natural environment. The authors review the literature on stakeholder theory and the debate over whom or what should count as a stakeholder. The authors also critique and expand the stakeholder identification and salience model developed by Mitchell and Wood (1997) by reconceptualizing the stakeholder attributes of power, legitimacy, and urgency, as well as by developing a fourth stakeholder attribute: proximity. (...) In this way, the authors provide a stronger basis for arguing for the salience of the natural environment as the primary and primordial stakeholder of the firm. (shrink)

Stakeholder theory advocates that firms bear responsibility for the implications of their actions. However, while a firm affects or can affect stakeholders, stakeholders can also affect the corporation. Previous stakeholder theorising has neglected the reciprocal nature of responsibility. The question can be asked whether—in a spirit of reciprocity, loyalty and fairness—stakeholders should treat the corporation in a fair and responsible way. This study based on different definitions of stakeholders argues that various stakeholder attributes differ for different categories of stakeholders. This (...) analysis presumes that the attribute of stakeholder reciprocity can probably be restricted to real stakeholders, labelled stakeowners: genuine stakeholders with a legitimate stake, the loyal partners who strive for mutual benefits. Stakeowners own and deserve a stake in the firm. Stakeholder reciprocity could be an innovative criterion in the corporate governance debate as to who should be accorded representation on the board. Corporate social responsibility should imply corporate stakeholder responsibility. (shrink)

This article revisits and further develops Mitchell et al.’s (Acad Manag Rev 22(4):853–886, 1997 ) theory of stakeholder identification and salience. Stakeholder salience holds considerable unrealized potential for understanding how organizations may best manage multiple stakeholder relationships. While the salience framework has been cited numerous times, attempts to develop it further have been relatively limited. We begin by reviewing the key contributions of other researchers. We then identify and seek to resolve three residual weaknesses in Mitchell et al.’s ( 1997 (...) ) framework, thereby strengthening its foundations for further development. We argue, first, that urgency is not relevant for identifying stakeholders; second, that it is primarily the moral legitimacy of the stakeholder’s claim that applies to stakeholder salience; and last, that the salience of stakeholders will vary as the degrees of the attributes vary. These insights inform revised definitions of stakeholder salience and legitimacy, and necessitate a new theoretical underpinning for the role of legitimacy. Finally, we present an extensive agenda for future research with the objective of refueling research in stakeholder salience. (shrink)

Definitions of what it is to be a stakeholder are divided into "claimant" definitions requiring some sort of claim on the services of a business, "influencer" definitions requiring only a capacity to influence the workings of the business, and "combinatory" definitions allowing for either or both of these requirements. It is argued that for the purposes of business ethics, stakeholding has to be about improving the moral conduct of businesses by directing them at serving more than just the interests of (...) owners. On that basis, influencer definitions are eliminated on the grounds that they only concern morally neutral strategic considerations and combinatory definitions on the grounds that the combining of ethical and strategic considerations they promise can be less confusingly achieved through an exclusively claimant definition. It is concluded that for the purposes of business ethics, stakeholders are claimants towards whom businesses owe perfect or imperfect moral duties beyond those generally owed to people at large. (shrink)

ABSTRACT:We develop the concept of stakeholder salience to account for stakeholders who should matter to the firm, even when managers do not perceive them as important. While managers are responsible for attributing salience to stakeholders, they can overlook or ignore stakeholder importance because of market frictions that affect managerial perceptions or induce opportunism. When this happens, corporate financial and social performance can suffer. Thus, we propose that the perceptions of organizational and societal stakeholders should also codetermine the salience of the (...) focal stakeholder to the firm. We also propose that stakeholder dialogue can reduce the impacts that market frictions can have on managerial perceptions of stakeholder interests that should matter to the firm. Finally, we discuss how the refined conceptualization of stakeholder salience might have better predictive validity, be more normative, and make instrumental and normative stakeholder theory more convergent. (shrink)