Stakeholder theory by freeman 1984 provides us with a framework that can be used to map out the stakeholders of all different types of businesses. Concepts, evidence, and implications thomas donaldson georgetown university lee e. In the intervening years, the literature on stakeholder theory has become vast and diverse. Implementing and monitoring stakeholder strategies part iii. Edward freeman published his landmark book, strategic management. This book examines this body of research and assesses its relevance for our understanding of modern business. Stakeholder theory is a theory of management that concerns itself with matters related to morals and ethics in running a business. Teori stakeholder stakeholder theory ramizes dalam bukunya cultivating peace, mengidentifikasi berbagai pendapat mengenai stakeholder. This theory emphasises the importance of the involvement of stakeholders in the business in order to create value parmar et al, 2010. Edward freeman the purpose of this paper is to revisit the development of the stakeholder management approach developed in strategic management. Edward freeman, a professor at the university of virginia, in his landmark book, strategic management. Freeman, harrison and zyglidopoulos discuss the foundation concepts and implementation of stakeholder management as well as the advantages this approach provides to firms and their managers.
The premise of stakeholder concept is that corporations are not responsible. They have exceeded freemans intentions which are more libertarian and free. This is only a partial representation of ed freemans published works on stakeholder theory. A stakeholder approach to strategic management by r. Csr freeman, 1984, but have never accepted the chicago school ideology, we want to use this brief essay to propose some more helpful ideas about when the idea of csr can be useful, its relationship to stakeholder theory, and how we can dissolve, in a. Preston university of maryland the stakeholder theory has been advanced and justified in the man agement literature on the basis of its descriptive accuracy, instrumen tal power, and normative validity. Examining stakeholder theory through practice in order to both present the development of a technique and also ground it in the relevant literature, the presentation of each technique is introduced by a consideration of the existing literature. Mar 16, 2001 we begin by developing a brief history of the concept. A stakeholder approach identifies and models the groups which are stakeholders of a corporation, and both describes and. It is a practical theory because all firms have to manage stakeholders whether they are good at managing them is another issue. It was edward freeman 1984 who is credited for developing and bringing the theoretical approach to this term in business. Subsequently, some advocates have moved a bit too quickly and without proper definition or argument. Evans brako ntiamoah, priscilla oforiwaa egyiri, michael kwamega. Assessing freemans stakeholder theory springerlink.
It suggests that a companys stakeholders include people like employees, customers, community members, competitors, vendors, contractors, and shareholders. The stakeholder perspective is an alternative way of understanding how companies and people create value and trade with each other. A stakeholder approach points out the groups which. Stakeholder theory augments resource based theory by. Its publication proved to be a landmark moment in the development of stakeholder theory. Edward freeman born december 18, 1951 is an american philosopher and professor of business administration at the darden school of the university of virginia, particularly known for his work on stakeholder theory 1984 and on business ethics. Ed freemans 1984 award winning book, strategic management. A stakeholder approach was first published in 1984 as a part of the pitman series in business and public policy. They are delineated by differences in the csr obligations of busi. This book has served to define a starting point for subsequent scholars and executives and continues to inspire scholars and students concerned with a more practical view of how business. Stakeholder theory emphasizes the importance of groups that have a direct or indirect stake in the business freeman, 1984. Freeman doesnt cite mitroff as a source, rather he attributes stakeholder theory to discussions at the stanford research institute.
Examine social responsibility and how it influences stakeholder management differentiate between the systems theory, social network theory, collaboration theory and social exchange theory. Stakeholder theory promotes a practical, efficient, effective, and ethical way to manage organizations in a highly complex and turbulent environment freeman, 1984. Pdf a stakeholder approach to strategic management. The stakeholder concept and strategic management 3. In this regard, researchers on both topics are quick to point out that csr and stakeholder theory are not the same thing. A stakeholder approach 1984, the stakeholder theory originated by r. Stakeholder theory six principles of stakeholder theory. Edward freeman originally detailed the stakeholder theory of organizational management and business ethics that addresses morals and values in managing an organization. Stakeholder theory and the corporate objective revisited 366 organization science 153, pp. Freeman 1984 and the authors of subsequent developments in stakeholder theory e. Theory and practice fran ackermann and colin eden this article explores how top management teams can increase the robustness of their strategies by attending to important concepts emerging from the stakeholder literature. Freeman has engrossed much of the business ethics literature.
Stakeholders are clients, suppliers, employees, the government and the society where the company operates. The stakeholder ecosystem, this theory says, involves anyone invested and involved. A stakeholder approach, cambridge university press, new york. Freeman is also a researcher who prefers teaching to purely research work. When edward freeman first published his book about stakeholder theory in 1984, it raised awareness of the relationships and the rippleeffect of a company and its many stakeholders. Ian mitroff, in his 1983 book stakeholders of the organizational mind, originally laid out the concept. A stakeholder approach identifies and models the groups which are stakeholders of a corporation. Im sure that you remember friedmans thesis, but here it is as a reminder. Yes, sometimes the interests are in conflict, but over time they must be shaped in the same direction.
However, evans and freeman 1988 search normative foundations of stakeholder theory, which reflect the normative dimension of the theory. This is only a partial representation of ed freeman s published works on stakeholder theory. It suggests that shareholders are merely one of many stakeholders in a company. By extension, the theory highlights the importance of investing in. We then suggest that traditionally the stakeholder approach to strategic management has several related characteristics that serve as distinguishing features. For most business firms, which are the focus of this element, primary stakeholders include customers, employees, suppliers of tangible goods and services, suppliers of capital including share holders if the is a corporation or similar fom, and the communities in which the firm operates. A brief history of the development of this approach is followed by a summary and an assess. Corporate social responsibility and stakeholder theory. This is based on the assumption that an organisations as well as individuals, possess. Corporate social responsibility awareness, firm commitment and organizational performance. Lets take a look at freeman s thesis, and see just how different they are.
Analysis of three themes emanating from this literature leads to the development of. A stakeholder approach, a work that set the agenda for what we now call stakeholder theory. Since the 1980s stakeholder theory has developed the thesis that the organisation has a moral relationship with groups other than shareholders freeman, 1984. Youll notice right off that freeman s stakeholder theory replaces the. Stakeholder theory and the corporate objective revisited. The stakeholder theory is a theory of organizational management that states that companies could archive better performance by taking all stakeholders into account, not only shareholders. In line with this theory, proponents of the valuecreation approach argue that some of the financial benefits of socially responsible activities. A stakeholder approach published by pitman publishing in 1984. Stakeholder theory an overview sciencedirect topics.
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