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Examples of a company's internal and external stakeholders Protesting students invoking stakeholder theory at Shimer College in 2010. The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. [1]
In management, a stakeholder approach is the practice that managers formulate and implement processes that satisfy stakeholders' needs to ensure long-term success. [1] According to the degree of participation of the different groups, the company can take advantage of market imperfections to create valuable opportunities.
Berman, Wicks, Kotha and Jones distinguish between two primary models of stakeholder management in business, an "instrumental" approach, according to which business managers engage with their stakeholders in order to maximise long term financial outcomes, and a "normative" approach, which identifies a stakeholder commitment as a moral ...
Stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization. It was originally detailed by 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 ...
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).
Stakeholder management theory, stakeholder project management theory, and stakeholder government agency theory have all contributed to the intellectual foundation for multistakeholder governance. The history and theory of multistakeholder governance however departs from these models in four ways.
Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit. A growing number of financial institutions ...
The idea that upholding social responsibilities can help a company sustain its profits in the long term has been "part of mainstream management theory at least since the publication of Edward Freeman's 1984 classic, Strategic Management: A Stakeholder Approach", [3] according to an article by Wayne Norman and Chris MacDonald in 2004. [4]