Chapter 5 - Chapter 5 An Introduction to Stakeholders...

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Chapter 5 An Introduction to Stakeholders Origins of the Stakeholder Concept The stakeholder concept has become central to understanding business and society relationships. The term stakeholder is a variant of the more familiar and traditional concept of stockholders—the investors in or owners of businesses. What is the stake in stakeholder? o A stake is an interest or share in an undertaking. o A stake may also be a claim. A claim is a demand for something due or believed to be due. o The idea of a stake can range from simply an interest in an undertaking at one extreme to a legal claim of ownership at the other extreme. In between these two extremes is a “right” to something. This right might be a legal right to certain treatment rather than a legal claim of ownership, such as that or a shareholder. What is a stakeholder? o A stakeholder is an individual or group that has one or more of the various kinds of stakes in a business. Just as stakeholders may be affected by the actions, decisions, policies, or practices of the business firm, these stakeholders also may affect the organization’s actions, decisions, policies, or practices. In short, a stakeholder may be thought of as “any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization. Who are businesses stakeholders? o The production, managerial, and stakeholder views of the firm o Primary and secondary stakeholders o Core, strategic, and environmental stakeholders o A typology of stakeholder attributes: legitimacy, power, urgency Strategic, Multifiduciary, and synthesis views o Strategic approach The strategic approach views stakeholders primarily as factors to
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