Stakeholder Theory
Key concepts and considerations in Stakeholder Theory. Read more at https://www.stakeholdermap.com/stakeholder-theory.html
1. Controversial in America where shareholder have a big say in enterprises
1.1. not so in European
1.2. japan example
2. Milton Friedman, 1970, NY Times article
2.1. http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
3. Interesting historical context
3.1. 1919 - Henry Gantt, business must be responsible or they will be taken over - in context of rise of communism
3.2. 1970 - Friedman - anything other than shareholder view is SOCIALISM
3.3. As D Mayer states in an online Encyclopedia of Business perceptions of the ethics of businesses & corporations have gone through several cycles in U.S. history.
3.3.1. The public perceptions of the ethics or [sic] business in general and corporations in particular have gone through several cycles in U.S. history, and further restrictions on U.S. corporations are unlikely as long as most Americans participate in economic gains. [assume author means ethics of business in general....] Read more: http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Stakeholder-Theory.html#ixzz3VJR08Snj
3.3.2. indeed corporations in the first century of the United States were used for public purposes.
4. organisational ethics
4.1. why?
4.1.1. larger roles in society
4.1.1.1. health care
4.1.1.2. education
4.1.1.3. =friction betw
4.1.1.3.1. economics
4.1.1.3.2. shareholders
4.1.1.3.3. ethics
4.2. ethics and Stakeholder Theory
5. references
5.1. Stakeholder Theory & organisation ethics, Robert Phillips
5.2. Handbook of Research on Business Ethics and Corporate Responsibilities, Daniel Palmer, January 2015
5.3. http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Stakeholder-Theory.html
5.4. Organising for Work, Henry Gantt,
6. definitions
6.1. fiduciary
6.2. paradox
6.3. normative
7. Critics
7.1. Far from being morally superior to the status quo, critics charge that stakeholder theory advo- cates the violation of strong moral duties.
7.1.1. Relationships between managers & shareholders have moral dimensions, because managers have fiduciary obligations to shareholders
7.2. stakeholder paradox
7.2.1. balance shareholders
7.2.2. Multi-fiduciary stakeholder theory claims that managers are fiduciaries to a number of stakeholder groups. This would require that managers concomitantly put the needs of shareholders above other stakeholders and at the same time place other stakeholder interests above shareholder interests, which is logically impossible.
7.2.3. Goodpaster, 1991
7.3. investor owned corporations
8. responses to critics
8.1. stakeholder legitimacy
8.2. create problem of stakeholder identity
8.3. principle of stakeholder fairness
8.4. look it is just sensible to consider interests of more than shareholders
8.4.1. BP example
8.4.2. McDonalds & Jamie Oliver
8.4.3. news article about recent oil company
8.5. stronger heuristically
8.5.1. http://www.readcube.com/articles/10.1111%2Fbasr.12024?
8.6. "This use of the stakeholder concept is as an intelligence gathering mechanism to more accurately predict environmental opportunities and threats"
9. what is it?
9.1. characteristics
9.1.1. Stakeholder theory is conceived in terms that are "explicitly and unabashedly moral." 6
9.1.2. However, for stakeholder theory, attention to the interests and well- being of some non-shareholders is obligatory for more than the prudential and instrumental purposes of wealth maxi- mization of equity shareholders.
9.1.2.1. there are other normatively legitimate stakeholders besides equity shareholders.
9.1.3. three aspects
9.1.3.1. descriptive/empricial
9.1.3.2. intrumental
9.1.3.3. normative
9.2. in addition to employees, customers, suppliers you should also consider wider constiutents, analyse those groups and monitor and plan accordingly
9.2.1. in my view this just makes common sense at a business, project and programme level. there are have been some many examples of firms and their shareholder being directly affected by stakeholders
9.2.1.1. tram & shop keeper in edingurgh
9.2.1.1.1. TIE chairman David Mackay resigned in November 2010, describing the Princes Street section of the project as “hell on wheels”. Next to go was TIE chief executive Richard Jeffrey, who resigned in May 2011.
9.2.1.1.2. During a dispute between TIE and German contractors Bilfinger Berger in 2009, tram workers downed tools and halted the start of track laying in Princes Street.
9.2.1.2. niger delta spill example
9.2.1.2.1. also presence of activist organisations that support previously non-influential stakeholders e.g. stakeholderdemocracynetwork http://www.stakeholderdemocracy.org/
9.3. Edward Freeman Video on stakeholder theory
10. shareholder value theory
10.1. Milton Friedman, 1970, NY Times
10.2. is it a problem? really being pragmatic see later text
10.2.1. FIND LATER TEXT
10.3. yes is because it can make business to slow to respond to changing environment be that political, social, economic, technological. e.g. mcdonalds & Jamie Oliver, IT example that went bust? oil example from stakeholder news
11. Structure
11.1. What is stakeholder theory?
11.2. become important with examples
11.3. Why stakeholder approach?
11.3.1. contrast with shareholder value
11.4. critics of stakeholder theory
11.5. stakeholder theory in practice
11.5.1. US laws
11.5.1.1. "corporate constituency statutes" that make it permissible (but not mandatory) for corporate managers to take non-stockholder constituencies (stakeholders) into account.
11.6. diverse understandings
11.6.1. 9 categories or subsets of stakeholder theory
11.6.1.1. http://homes.chass.utoronto.ca/~jheath/stcg+pm.pdf
11.6.2. the literature on stakeholder theory has become vast and diverse.