The Stakeholder Theory - 11680 Words

The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications Author(s): Thomas Donaldson and Lee E. Preston Source: The Academy of Management Review, Vol. 20, No. 1 (Jan., 1995), pp. 65-91 Published by: Academy of Management Stable URL: http://www.jstor.org/stable/258887 Accessed: 20/04/2010 23:08 Your use of the JSTOR archive indicates your acceptance of JSTOR s Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR s Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal,†¦show more content†¦Unfortunately, anyone looking into this large and evolving literature with a critical eye will observe that the concepts stakeholder, stakeholder model, stakeholder management, and stakeholder theory are explained and used by various authors in very different ways and supported (or critiqued) with diverse and often contradictory evidence and arguments. Moreover, this diversity and its implications are rarely discussed-and possibly not even recognized. (The blurred character of the stakeholder concept is also emphasized by Brummer, 1991.) The purpose of this article is to point out some of the more important distinctions, problems, and implications associated with the stakeholder concept, as well as to clarify and justify its essential content and significance. In the following section we contrast the stakeholder model of the corporation with the conventional input-output model of the firm and summarize our central thesis. We next present the three aspects of stakeholder theory -descriptive/empirical, instrumental, and normative found in the literature and clarify the critical differences among them. We then raise the issue of justification: Why would anyone accept the stakeholder theory over alternative conceptions of the corporation? In subsequent sections, we present and evaluate the underlying evidence and arguments justifying the theory from the perspective of descriptive, instrumental, and normative justifications. We conclude that the three approachesShow MoreRelatedStakeholders Theory5106 Words   |  21 PagesT he stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization.[1] It was originally detailed by R. Edward Freeman in the book Strategic Management: A Stakeholder Approach, and identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address the Principle of WhoRead MoreStakeholder Theory Vs. Stakeholder Thinking1160 Words   |  5 PagesStakeholder theory and definition Stakeholder is defined as â€Å"any group or individual who can affect or is affected by the achievement of the organization’s objectives† (Freeman 1984). 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