Stakeholders Theory

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  • Topic: Stakeholder theory, R. Edward Freeman, Stakeholder
  • Pages : 23 (4406 words )
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  • Published : February 5, 2013
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The Stakeholder theory of the firm
(Course: Business ethics)

Coursework
2013

Faculty of
Economics

Content

Introduction ................................................................................................................................ 3 1

Basic idea of the Stakeholder Theory ................................................................................ 4 1.1
1.2

Who are the stakeholders ............................................................................................. 4

1.3

Why to deal with the interests of stakeholders ............................................................ 5

1.4

What do stakeholders expect from the firms ............................................................... 6

1.5
2

What is a stakeholder ................................................................................................... 4

Stakeholder Analysis ................................................................................................... 7

Concept of Stakeholder theory ......................................................................................... 10 2.1

3

Stakeholder theory from the Freeman’s view............................................................ 11

Normative and analytical theory ...................................................................................... 11 3.1

Normative theory ....................................................................................................... 12

3.2

Freeman’s normative theory ...................................................................................... 13

3.3

Analytical theory ....................................................................................................... 14

Conclusion ................................................................................................................................ 15

2

Introduction
In this coursework I would like to clarify fundamental thoughts of the Stakeholder theory concept. This term has acquired an importance in recent years. In general, it says that managers should make decisions so as to take into account all of the interests of all stakeholders in a firm. We can clearly see from that sentence that stakeholders are very important for making business operation successful, but it is necessary to unite interests of participating subjects in order to achieve values they wish to obtain. At the beginning I will try to explain basic definitions regarding to this topic. I will define term stakeholders, who these people are, why they are important in business, what they expect from companies. Then I will try to expand stakeholder analysis process. Next part will be about Stakeholder theory concept itself which I will mainly explain from R. Edward Freeman’s view who is the greatest person connected with this topic. He is considered to be a father of the Stakeholder theory as he determined first definition of a stakeholder as “any group or individual who can affect or is affected by t he achievement of the organization’s objectives“. That is why I consider important to focus on his personality. In third part I focused on three approaches in stakeholders theory – normative, descriptive and instrumental.

3

1 Basic idea of the Stakeholder Theory
Stakeholder theory has developed to face the problem of managing and understanding a business in the world of the 21st century (the problem of trade and value creation), putting together thinking about questions ethics, responsibility, sustainability. “Any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984), that is a traditional definiton of a stakeholder. The general

thought of the Stakeholder concept

is a redefinition of the organization.

Universally, the idea is about what the organization should be and how it should be conceptualized.

1.1

What is a...
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