Managerial Stakeholder Theory - Essay

Topics: Management, Stakeholder theory, Stakeholder Pages: 8 (2985 words) Published: November 4, 2012
Managerial Stakeholder Theory
To predict real-life phenomena we need theories. Similarly, stakeholder theory is a theory which is used to explain the phenomena of motivation for corporate social disclosures. This research work is based on the concept of stakeholder theory and its practical applications in predicting the phenomena of corporate social disclosures (van der Laan 2009). Further there will be explanation of Managerial stakeholder theory. The concept of stakeholder theory has got popularity among corporate world, managers, media and academics. Concept of Stakeholder management theory is very much related to business ethics and it has dominated the literature of business ethics. In doing business values become a necessary part of the organization and stakeholder theory starts from this assumption. Stakeholder theory explains the behavior of managers towards their stakeholders and also tells us how the managers want to do the business. The theory also clears that what kind of relationship managers want with their stakeholders and what kind of relationship they should have (Aarhus School of Business 2004). There will also be a brief history of stakeholder theory and its role in explaining the motivation for corporate social disclosures. There are two theories which are offered to describe the phenomena of motivation for the corporate social disclosures. First one is managerial stakeholder theory and another is legitimacy theory. Legitimacy theory is not our concern here as it says that corporate social disclosures are voluntary in nature and are part of process of legitimating (Crane & Ruebottom 2011). An article “The role of theory in explaining motivation for corporate social disclosures: voluntary disclosures v/s solicited disclosure” from the journal “Australasian accounting business and finance journal” is considered to complete the assessment. The article is a good source of information for the topic stakeholder theory as it is currently written. This is a highly reliable article as it is taken from the journal which is a journal of university of Sydney. The article covers all the information which is required to complete this assessment. It explains the concept of corporate social disclosures in detail and how it is motivated by the theories like stakeholder theory and legitimacy theory. Accuracy of the article is excellent as it is easily accessible and contacting information of the author is also provided. The author is a highly renowned author in Australia and also is a faculty of economics and business in the University of Sydney (Colorado college community 2012). The phenomenon which is discussed in this work later is of motivation for corporate social disclosures. Corporate social disclosures are primarily voluntary in nature as it tells the stakeholders of an organization about the internal information of the organization. Stakeholders are the important part of the organization and they should have the information about the organization. But today corporate social disclosures are not voluntary every time as there are companies which keep their stakeholder away from the information which can affect them. Stakeholders like NGO’s, regulatory agencies, fund managers who are directly or indirectly associated with the organization are demanding the social information from the companies and thus increasing the social responsibilities of the companies (Crane & Ruebottom 2011). This is how the concept of solicited corporate social disclosure comes into existence. Due to this confusion around disclosure principles we have a big area of research. According to Freeman the definition of Stakeholder is “any group or individual who can affect or is affected by the achievement of the organization.” Shareholders also come under stakeholders group as they are the important part of the organization. Shareholders are also affected by the firm’s success or failure just like customers, suppliers, employees...

References: Ruebottom, T & Crane, A 2011, Stakeholder theory and social identity: Rethinking stakeholder identification, J Bus Ethics, vol. 102, pp. 77-87.
Laan, S 2009, The role of theory in explaining motivation for corporate social disclosure: voluntary disclosure vs ‘solicited’ disclosure, Australasian accounting business and finance journal, vol. 3, no. 4.
Reed, D 1999, Stakeholder management theory: a critical theory perspective, Accessed on 3 august 2012,
Fonatine, C, Haarman, A & Schmid, S 2006, The Stakeholder theory, Accessed on 3 August 2012,
Colorado community colleges 2012, five criteria for evaluating web pages, Viewed on 3 August 2012,
Heath, J & Norman, W 2004, Stakeholder theory, corporate governance and public management, Journal of business ethics, vol. 53, pp. 247-265.
Reynolds, S, Schultz, F & Hekman, D 2006, Stakeholder theory and managerial decision making: constraints and implications of balancing stakeholder interests, Journal of business ethics, vol. 64, no. 3, pp. 285-301.
Phillips, R, Freeman, R, & Wicks, A 2003, what stakeholder theory is not, Business ethics quarterly, vol. 13, no. 4, pp. 479-502.
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