week2.readings.Freeman

week2.readings.Freeman - THE POLITICS OF STAKEHOLDER THEORY...

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THE POLITICS OF STAKEHOLDER THEORY: SOME FUTURE DIRECTIONS^ R. Edward Freeman Abstract: The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatdght, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stake- holder theory becomes a genre that is quite rich. It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of "business" together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business. S everal recent papers have raised important conceptual questions about the idea of "stakeholder management" or "stakeholder theory." Kenneth Goodpaster has sounded a significant challenge by diagnosing a "stakeholder paradox" at the heart of stakeholder theory.^ James Kuhn and Donald Shriver have attacked the very idea that stakeholder relationships are to be managed at all, proposing instead a "constituency view" that sees the corporation and its stakeholders as a voluntary community.^ Martin Meznar, James Chrisman and Archie Carroll have straddled this controversy by explicitly connecting stakeholder management to business strategy and adopting a utilitarian ethic for its defense.'* And, John Boatright has argued that while the special nature of stockholder claims can't be justified—there is no argument for the special nature of stakeholder claims.' The purpose of this paper is to enter this conversation with the goal of clarify- ing certain foundational issues. I want to show in Part II, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. In Part III I suggest that if we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of "business" together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that ©1994. Business Ethics Quarterly, Volume 4, Issue 4. ISSN 1052-150X. 0409-0421.
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410 BUSINESS ETHICS QUARTERLY combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business. In Part IV I shall sketch one such story based on some recent papers on stakeholder theory. And, finally in Part V I want to suggest
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