Stakeholder Theory
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Stakeholder Theory
The Stockholder Theory maintains that managers should act as agents to the stockholder and only serve their interests-the maximization of profits. Milton Friedmans argument being, they are the owners of the business, and hence they should be entitled to all profits. In general the concept is about what the organization should be and how it should be featured. The purpose of the organization should be to manage their interests, needs and viewpoints. The managers should on the one hand manage the corporation for the benefit of its stakeholders in order to ensure their rights and the participation in decision making and on the other.
on orientated so the academic circles prefer the definition of
Friedman means that there is a clear relationship between definitions of what
stakeholders and identification of who are the stakeholders. The main groups of
stakeholders are:
* Customers
* Employees
* Local communities
* Suppliers and distributors
* Shareholders
An argument for the more frequently used stakeholder concept in the early
1980s could be the changes among workers, students, consumer groups and
environmentalists in the late 1960s. One possibility of arguing about the development
of this field is to see the planning process as becoming increasingly sensitive to the
business environment and the need for good information about it. Friedman (2006)
has the opinion that at the time where the SRI came up with their memo they called
for information systems to scan and track stakeholder responses to changes in
corporate strategy as part of this environment. The SRI has developed “measures of
satisfaction” for the stakeholder groups who they have found. Freeman (1984) noted
that planners did not want to attempt to influence specific stakeholder behavior rather
they wanted only to forecast the future environment in order to adapt it with the
capabilities of the company. In the 1960s the environment was very stable, relatively
static and kind of predictable. Freeman (1984) stated that prior to his work, the
strategic