Week 6 Critique of Stakeholder - Week 6: Normative...

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Week 6: Normative Stakeholder Debates continued: Critiques of Stakeholder Theory SOSC 3040 Corporate Social Responsibility
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Taking Stock Hasnas reviews: Stockholder Theory (Friedman) Normative Stakeholder Theory (Freeman) Social Contract Theory of CSR (Donaldson and Dunfee) Note: this social contract theory may be regarded as a version of stakeholder theory, not to be confused with contract theory of the firm
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Questions to Ponder What does Hasnas think are the main shortcomings of stakeholder and social contract theories of CSR? What assumptions does Hasnas make? E.g.—that managers have an actual (if implicit) contract with shareholders
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Agency vs Stakeholder Theories Maitland focuses on one critique of stakeholder theory, from “agency theory” Claims theories don’t actually disagree about normative issues Both stakeholder and stockholder theories based on normative value of stakeholder self-determination
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Agency Theory of Firm Developed by Michael Jensen & colleagues in Firm as a “nexus of contracts” Corporation gives all stakeholders what is necessary to secure their participation in context of competition Profit seeking management secures investment by residual risk bearing financiers – Michael C. Jensen
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Agency Theory and Stockholder Theory In effect, agency theory is a kind of stockholder theory management as agent of the shareholders, with fiduciary
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This note was uploaded on 11/16/2010 for the course NATURAL SC NATS 1505 taught by Professor Isley during the Spring '10 term at Columbia State Community College.

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Week 6 Critique of Stakeholder - Week 6: Normative...

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