What is the stakeholder model of the modern corporation?

Stakeholder Theory is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.

What is Freeman’s 1984 definition of stakeholder?

The term stakeholder first “appeared in the management literature in an internal memorandum at the Stanford Research Institute, in 1963” (Freeman, 1984, p. 31). The word means “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984, p. 46).

What is Freeman’s theory called and what does it emphasize?

Freeman’s proposed “new story of business” emphasizes the idea of responsible capitalism, where businesses are driven not just by profits, but by purpose, values, and ethics.

What is the basic idea of Freeman’s stakeholder theory?

Let’s take a look at Freeman’s thesis, and see just how different they are. “The basic idea is that businesses, and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers (or shareholders).” [1]

Who is the founder of the stakeholder theory?

(2004) with Andrew Wicks and Bidhan Parmar, Stakeholder Theory and “The Corporate Objective Revisited ,” Organization Science, Volume 15 Issue 3, May-June 2004, pp. 364–369. (2001) Stakeholder Theory of the Modern Corporation, Perspectives in Business Ethics Sie, Volume 3, p. 144.

What is the stakeholder theory of capitalism and freedom?

Also called the “Friedman doctrine,” shareholder theory, outlined in Friedman’s book “Capitalism and Freedom,” states that a company has no real “social responsibility” to the public, since its only concern is to increase profits for the shareholders. The shareholders, in turn, would privately shoulder any social responsibility.

What does Freeman and Reed mean by stakeholder?

The concept of stakeholders is a generalization of the notion of stockholders, who themselves have some special claim on the firm. Freeman and Reed (1983) distinguish two senses of stakeholder. The “narrow definition” includes those groups who are vital to the survival and success of the corporation.