Stakeholder theory

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  • The Stakeholder Theory

    The stakeholder theory is a theory of organizational management and business ethics that address morals and values in managing an organization. It addresses the importance of how companies and corporations should empower the stakeholders, not only the shareholders. The stakeholder perspective is used in developing particular guidelines for assessing human resource management effectiveness, and how that should treat the individuals that are shareholders or stakeholders. Freeman describes two definitions of what stakeholders are, a narrow definition and a wide definition. The narrow definition includes those groups who are vital to the success and survival of a corporation. The wide definition includes any group or individual in an organization…

    Words: 717 - Pages: 3
  • A Stakeholders Theory Of The Modern Corporation Analysis

    Yelp is a perfect example of the Modern Corporation in R. Edward Freeman’s essay “A Stakeholder Theory of the Modern Corporation”. Freeman argues that modern corporations don’t just have an obligation to stockholders in the drive to make a profit where all benefit. Instead, the modern corporation has a “fiduciary relationship” to stakeholders . . .who are those groups who have a stake or a claim on the firm”(Freeman). These groups, while they may not be stockholders per say, have an important…

    Words: 2075 - Pages: 8
  • Freeman Vs. Friedman's Stakeholder Theory Of The Modern Corporation

    Although not explicitly stated, this is something that both theorists agree upon. Both men agree with the “invisible hand” doctrine which calls for true free enterprise in which the government need not interfere. On the other hand, however, there are obviously several things that the two men did not agree upon. The main point that the theorists disagreed on was as to who actually held stake in the business. According to Friedman’s classical beliefs, the only people that have stake in the…

    Words: 1866 - Pages: 8
  • Stakeholder Theory: Applied To The GM Ignition Switch Case

    These costs and benefits from staying or leaving the market can be examined with the three elements of stakeholder theory: rights, justice, and utilitarianism. The rights component would analyze the effect of the glue business on the population. Since the glue is deteriorating the health conditions of the children on the streets; it is taking away the basic right of health for the kids. Conversely, H.B. Fuller’s presences gives the local people jobs and provides them with an inflow of money. …

    Words: 2390 - Pages: 10
  • Stakeholder Theory Essay

    2.2 Stakeholder Theory In traditional view, the companies serve only their shareholders because they are the owners of the company. Therefore the companies have the financial obligations towards shareholders which have always put the shareholders’ needs at first (Friedman, 1970). However, the stakeholder theory argued that the companies should properly serve the stakeholders’ needs first before they can meet the shareholders’ expectations, because it is believed that the stakeholders have…

    Words: 730 - Pages: 3
  • Advantages And Disadvantages Of Shareholder Theory

    a) The stakeholder theory is a strategy that takes stakeholders into consideration when making decisions to achieve higher business performance. Stakeholders are people who affect and are affected by a business’ performance. Other than shareholders or owners, customers, government, employees, and suppliers are some examples of stakeholders. The theory provides an alternative to the shareholder theory, which states that companies must focus only on maximizing the market value of the equity of its…

    Words: 705 - Pages: 3
  • Stakeholder Theory Vs Shareholder Theory

    One of the greatest decisions facing corporate directors today is whether corporations should concentrate on shareholder interests or stakeholder interests. Shareholder theory states a manager’s “responsibility is to conduct the business in accordance with shareholder desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom” (Milton Freidman). Whereas Stakeholder theory…

    Words: 784 - Pages: 4
  • Pros And Cons Of Stakeholder Theory

    The concept of the stakeholder theory is very intriguing. Stakeholder Theory is the theory of organizational management and business ethics that addresses morals and values in managing an organization (Corporateethics, 2009). From the research done stakeholders are those who create value for a company. These are people who assist in keeping company projects aligned. Not only do they work to improve the status of the company but how the company impacts the community or economic make-up of the…

    Words: 1019 - Pages: 4
  • The Pros And Cons Of Nike Financing

    This paper presented the shift from Stockholder dominant theory to stakeholder theory that took place over the decades. Now corporations do not only have a responsibility towards their shareholders as Friedman argued, they also have a responsibility towards all of its stakeholders too. Furthermore all stakeholders should be treated as ends themselves. Applying this shift to Nike case study, it is clear that Nike does not only have to be accountable for its shareholders – to make profits for them…

    Words: 1202 - Pages: 5
  • Friedman And Milton Friedman's Corporate Social Responsibility?

    supporting stakeholder theory, the component that “an individual surrenders a degree of autonomy to an organisation” (Gibson 2000; p. 252) is still relevant in the traditional view. If the shareholders’ interests are in line with maximising profits than, to a certain extent, so too are the businessmen’s actions. (2) If they were able to spend the profits of stockholders, a big issue would be knowing how much of the profits they are able to spend before it stops being the shareholders’ profits…

    Words: 1433 - Pages: 6
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