Stewardship TheoryArgues and looks at a different form of motivation for managers drawn from organizationaltheory. This theory stipulates that a manager’s objective is First to maximize the firm’sperformance because a manager’s need of achievement and success are met when Firm(Coleman, 2008). The firm is doing well (Coleman, 2008). The dominant motive, which directs managers toaccomplish their job, is their desire to perform excellently. While profit drives any business,some companies may consider themselves part of something bigger. Stewardship theory holdsthat ownership doesn’t really own a company; it’s merely holding it in trust. This shows itself inthe way it does business. The operation may be a vehicle for a higher calling or designed tohonor a founder’s initial vision, so making a profit often takes a back seat to meeting acompany’s social standards. Employees can tell fairly quickly if a company’s stewardship stancetranslates into how they’re treated. Workers may have higher expectations than they would if anemployer operates under a pure profit motive. However, employees who hold to the same visiontend to stick around and work hard to achieve the company’s goals even if compensation is notas much as they can get elsewhere. A solid sense of stewardship improves company morale whenthe workers feel they’re part of something bigger. (Bondigas). This motivates the employees towork towards achieving the objective of the corporative society.Stakeholder TheoryCenters on the issues concerning the stakeholders in an institution. It stipulates that a corporateentity invariably seeks to provide a balance between the interests of its diverse stakeholders inorder to ensure that each interest constituency receives some degree of satisfaction (Abrams,1951). A stakeholder is defined as any person/group which can affect/be affected by the actions
of a business. It includes employees, customers, suppliers, creditors and even the widercommunity and competitors.(Edward Freeman), the original proposer of the stakeholder theory, recognized it as an importantelement of Corporate Social Responsibility (CSR), a concept which recognizes theresponsibilities of corporations in the world today, whether they be economic, legal, ethical oreven philanthropic. Nowadays, some of the world’s largest corporations claim to have CSR at thecenter of their corporate strategy. Whilst there are many genuine cases of companies with a“conscience”, many others exploit CSR as a good means of PR to improve their image andreputation but ultimately fail to put their words into action.However, there is an argument that the theory is narrow [ CITATION Col08 \l 1033 ]because itidentifies the shareholders as the only interest group of a corporate entity. It helps to accesswhether the corporative society is serving the interest of all the groups making up the society.