Stakeholder (corporate)

In a corporation, a stakeholder is a member of "groups without whose support the organization would cease to exist",^[1] as defined in the first usage of the word in a 1963 internal memorandum at the Stanford Research Institute. The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR). The definition of corporate responsibilities through a classification of stakeholders to consider has been criticized as creating a false dichotomy between the "shareholder model" and the "stakeholder model",^[2] or a false analogy of the obligations towards shareholders and other interested parties.^[3]

^ Freeman, R. Edward; Reed, David L. (1983). "Stockholders and Stakeholders: A new perspective on Corporate Governance". California Management Review. 25 (3): 88–106. doi:10.2307/41165018. JSTOR 41165018. S2CID 154711818. Retrieved 21 October 2017.
^ Frémond, Olivier (October 2000). "The Role of Stakeholders" (PDF). OECD.
^ Heath, Joseph (2006). "Business ethics without stakeholders". Business Ethics Quarterly. 16 (3): 533–557. doi:10.5840/beq200616448. One of the central advantages of the market failures approach to business ethics is that, far from being antithetical to the spirit of capitalism, it can plausibly claim to be providing a more rigorous articulation of the central principles that structure the capitalist economy. If firms were to behave more ethically, according to this conception, the result would be an enhancement of the benefits that the market provides to society, and the elimination of many of its persistent weaknesses. It would help to perfect the private enterprise system, rather than destroy it.

[1] Freeman, R. Edward; Reed, David L. (1983). "Stockholders and Stakeholders: A new perspective on Corporate Governance". California Management Review. 25 (3): 88–106. doi:10.2307/41165018. JSTOR 41165018. S2CID 154711818. Retrieved 21 October 2017.

[2] Frémond, Olivier (October 2000). "The Role of Stakeholders" (PDF). OECD.

[3] Heath, Joseph (2006). "Business ethics without stakeholders". Business Ethics Quarterly. 16 (3): 533–557. doi:10.5840/beq200616448. One of the central advantages of the market failures approach to business ethics is that, far from being antithetical to the spirit of capitalism, it can plausibly claim to be providing a more rigorous articulation of the central principles that structure the capitalist economy. If firms were to behave more ethically, according to this conception, the result would be an enhancement of the benefits that the market provides to society, and the elimination of many of its persistent weaknesses. It would help to perfect the private enterprise system, rather than destroy it.

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