The nature of stakeholder theory and its fundamental normative prescriptions are the subject of much confusion and academic debate. This article attempts to provide an account of both the fundamental normative implications of stakeholder theory and the theory’s range of application that both stakeholder advocates and critics can agree upon. Using exclusively the language of leading stakeholder theorists, the article identifies the essential prescriptions of the theory and the type of organizations to which stakeholder theory (...) applies in the hope of facilitating effective discussion and evaluation of the normative dimension of stakeholder theory. (shrink)

Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company-favoring outcomes of CSR; yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on (...) meansend chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research. (shrink)

Abstract: Stakeholder theorists have typically offered both a business case and an ethics case for business ethics. I evaluate arguments for both approaches and find them wanting. I then shift the focus from ethics to law and ask: “Why should corporations obey the law?” Contrary to what shareholder theories typically imply, neoclassical or profit maximization theories of the firm can offer answers based only on instrumental justifications. Instrumental justifications for obeying the law, however, are pragmatically and normatively incoherent. This (...) is because the modern corporation is a legal artifact. It exists because communities create the legal framework necessary for its existence. Individual corporations can therefore be said to owe their existence to a partnership (what might be called a social contract) between shareholders and governments, a partnership that is itself built on the shared though often implicit understanding that corporations have an unconditional (categorical) obligation both to obey the law and to treat their stakeholders ethically while generating wealth for their shareholders. (shrink)

Lack of specificity around stakeholder identity remains a serious obstacle to the further development of stakeholder theory andits adoption in actual practice by business managers. Nowhere is this shortcoming more evident than in stakeholder theory’s treatment of the constituency known as “community.”In this paper we attempt to set forth what we call “the Problem of Community” as indicative of the definitional problems of stakeholdertheory. We then begin the process of gaining greater specificity around our notions of community (...) and the role of community in stakeholder theory and management. In doing so, we identify the emergence of two fairly new forms of community that we believe are particularly relevant to the stakeholder theorist and practicing manager. These two new variants of community—the virtual advocacy group and the community of practice—extend the notion of community in new directions, which have strikingly different implications for stakeholder theory and practice. (shrink)

Stakeholder theorists have traditionally objected to the neoclassical conception of the firm as a vehicle for maximizing profit or shareholder wealth, thus opening up space for controversial engagement with neoclassical economics. The present paper fills some of this space by elaborating the parallels between stakeholder theory and classical institutional economics, a heterodox school of economic thought that has long been critical of a broad range of neoclassical ideas. Rooted in the writings of Veblen and Commons, classical institutional economics (...) explores how the social provisioning process is coordinated or hindered by real-world business institutions. From this standpoint, stakeholder theory highlights the possibility of overcoming the institutionally ingrained conflicts and trade-offs for the sake of realizing common human interests in organizing the social provisioning process in an orderly and reasonable way. This argument not only illuminates the relationship of stakeholder theory to the wider societal context of modern capitalist economies but also elaborates novel aspects of the moral nature of stakeholder management. (shrink)

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should (...) support giving all stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed. (shrink)

Abstract:This article elaborates a normative Stakeholder Management Theory (SHMT) from a critical theory perspective. The paper argues that the normative theory elaborated by critical theorists such as Habermas exhibits important advantages over its rivals and that these advantages provide the basis for a theoretically more adequate version of SHMT. In the first section of the paper an account is given of normative theory from a critical theory perspective and its advantages over rival traditions. A key characteristic of the critical (...) theory approach is expressed as a distinction between three different normative realms, viz., legitimacy, morality, and ethics. In the second section, the outlines of a theory of stakeholder management are provided. First, three basic tasks of a theoretically adequate treatment of the normative analysis of stakeholder management are identified. This is followed by a discussion of how a critical theory approach to SHMT is able to fulfill these three tasks. (shrink)

Contrary to stockholder theories that place the interests of profit-seeking owners above all else, stakeholder theorists argue that corporate executives have moral and ethical obligations to consider equally the interests of a wide range of stakeholders affected by the actions of a corporation. This paper argues that the stakeholder approach is particularly appropriate for the governance of news media companies and outlines an ethical framework to guide news company executives.

Within stakeholder literature, much attention has been given to which stakeholders "really count." This article strives to explain why organizational theorists should abandon the pursuit of "Who and What Really Counts" to challenge the assumption of a managerial perspective that defines stakeholder legitimacy. Reflecting on the paucity of employee rights and protections in marginalized work environments, I argue that as organizational researchers, we must recognize and take responsibility for the impact of our research models and visions. By confronting (...) and rethinking the foundational assumptions of stakeholder theory, business and society scholars can identify and pursue research questions that more effectively address contemporary social challenges. (shrink)

Portraying the firm as a ‘black box’, as traditional conceptions of the firm tend to do, has been strongly criticised by stakeholder theorists. This article claims, however, that the ‘black box problem’ has not been satisfactorily resolved by stakeholder theory itself. The failure to bring clarity to the internal realities of the firm has led to unacceptable conceptions of the firm from a moral agency point of view. For example, stakeholder theory tends to portray the firm as (...) an exchange system with an input-output thought model as a basis. Such a conception does not provide a credible account of moral agency and results in problematic consequences for stakeholder theory, for example when it comes to motivating the existence of corporate moral purposes and ethically acceptable foundations of stakeholder interests. (shrink)

Critics attack normative ethical stakeholder theory for failing to recognize the special moral status of shareholders that justifiesthe fiduciary duties owed to them at law by managers. Stakeholder theorists reply that there is nothing morally significant about shareholders that can underwrite those fiduciary duties. I advance an argument that seeks to demonstrate both the special moral status of shareholders in a firm and the concomitant moral inadequacy of stakeholder theory. I argue that (i) if some relations morally (...) requirefiduciary duties, and (ii) the shareholder-manager relation possesses the features that make fiduciary duties morally necessary to thoserelations, then (iii) stakeholder theory is morally lacking. (shrink)

Abstract:After a decade of intensive debate, stakeholder ideas have come to exert a significant influence on academic management thinking, but normative stakeholder theory itself appears to be in considerable disarray. This paper attempts to untangle the confusion and to prepare the ground for a more productive approach to the normative stakeholder problem. The paper identifies three distinct kinds of normative stakeholder theory and three different levels of claim that can be made by such theories, and uses (...) this classification to argue that stakeholder theorists have consistently pitched their sights either too high or too low to engage effectively with the rival shareholder theory. To the extent that they have their sights too high they have also undermined their own position by sacrificing credibility and introducing major problems of derivation. (shrink)

Stakeholder theorists distinguish between normative stakeholders, those who gain moral standing by making contributions to the firm, and derivative stakeholders, those who can constrain the corporate association even though they make no contribution. The board of directors has the legal authority to distinguish among these stakeholder groups and to distribute rights and obligations among these stakeholder groups. To be sure, this stakeholder formulation appropriately seizes on the firm’s voluntary, associative character. Yet, the firm’s constituents contribute assets (...) and incur risks to participate in market, economic activities. And, as such, the firm’s “stakeholders” must share an imperfect language to assist in making two key economic decisions: (1) who are the legitimate and who are the derivative stakeholders; and (2) who should sit on the board? Still, stakeholder theorists have good reason to be skeptical of neoclassical economics. Its assumptions that all act opportunistically and that all can calculate rationally and fully hardly correspond to studies on the managerial experience of corporate coordination. However, advances in behavioral law and economics now provide a cogent economic logic that readily fits into a stakeholder mode. In brief, we argue that (1) the firm’s economic purpose designates legitimacy to core stakeholders, to those who add value, assume unique risk, and can incur harm; (2) the board serves as the principal who coordinates these core stakeholders to sustain competitive advantage and new wealth creation; and (3) state incorporation law, Delaware in particular, reinforces the board’s function. These, in turn, supply selection criteria for board membership. We aim to synchronize concepts from behavioral law and economics with stakeholder theory. (shrink)

Bridoux and Stoelhorst (2022) employ Nobel laureate Elinor Ostrom’s institutional design principles to develop two models of stakeholder governance. They argue that these “community governance” models will help achieve a fairer distribution of stakeholder value compared with approaches that centralize governance in the hands of management. We identify four characteristics, however, that thwart any straightforward application of these community governance models to business firms: ease of exit; lack of legacy social capital; heterogeneity of interests; and power imbalances. We (...) then conclude, following Ostrom herself, that governance often requires external institutional arrangements that stakeholder theorists have not fully appreciated. (shrink)

Stockholder and stakeholder perspectives have been positioned in the literature as being in tension, and thus a potential source of innovation and change. However, researchers have overlooked a systematic examination of this presumption in theory and in practice. This study explores the ways that stockholder and stakeholder assumptions are presented by theorists and compares these with expressions of stockholder and stakeholder perspectives used by firms in practice. We argue that theoretical entrenchment dichotomizing these perspectives has disrupted the (...) ability of researchers to leverage this tension. While scholarship remains trapped in a vicious cycle, we also argue that firms in practice express only the acceptance dimension of a virtuous cycle. Our empirical research demonstrates that firms accept and accommodate the paradoxical tension between managing for stockholders versus balancing the interests of stakeholders. This is evidenced by strategies we identify as book‐ending, cadence, continuous and simultaneous co‐mingling, and hybridization. We find that in practice these tensions are more integrated whereas in theory they are treated as more distinct and, often, in conflict. We suggest ways in which both scholarship and practice can better leverage tension as paradoxical opportunity. (shrink)

Aimee Barbeau advances a thoughtful critique of my article, “The Connection Between Stakeholder Theory and Stakeholder Democracy: An Excavation and Defense.” Although Barbeau does much to push forward the debate about corporate governance, she does it without undermining my thesis. For what Barbeau has shown is not that stakeholder theorists should not endorse stakeholder boards of directors, but that they should also endorse other ways for stakeholders to participate in decision-making processes within firms.

Roughly speaking, Enron has done for reflection on corporate governance what AIDS did for research on the immune system. So far, however, virtually all of this reflection on and subsequent reform of governance has come from those with a stake in the success of modern capitalism. This paper identifies a number of governance challenges for critics of capitalism, and in particular for those who urge corporations to voluntarily adopt missions of broader social responsibility and equal treatment for all stakeholder (...) groups. I argue that by generally neglecting the governance relation between shareholders and senior managers, stakeholder theorists have underestimated the way in which shareholder-focused governance can be in the interests of all stakeholder groups. The enemy, if you will, is not capitalists, but greedy, corrupt or incompetent managers. A second set of governance challenges for stakeholder theorists concerns their largely untested proposals for governance reforms that would require managers to act in the interests of all stakeholders and not just shareholders; in other words to treat shareholders as just another stakeholder group. I suggest that in such a governance regime it may be almost impossible to hold managers accountable to anyone – just as it was when state-owned enterprises were given “multi-stakeholder” mandates in the 1960s and 1970s. (shrink)

Most discussions concerned with advancing the just and ethical treatment of research participants in developing countries have revolved around the moral principle of autonomy and the legal doctrine of informed consent. However, if emerging ethical concerns are to be addressed effectively, the discussion needs to expand into the domain of business ethics where arguments addressing issues such as fair/appropriate compensation, entitlement, and corporate obligations to stakeholders are commonplace. The argument I present in this paper will conclude that emerging ethical considerations (...) regarding the treatment of research participants in developing countries have evolved well beyond the scope of the principle of informed consent and that in order to resolve these concerns more appropriately and effectively, the new default or status quo should be to consider research participants as stakeholders of the sponsoring pharmaceutical company, even after the clinical trial is completed. This conclusion is significant because although it is fair to assume that, at some point in the timeline, most stakeholder theorists already do consider research participants stakeholders of the pharmaceutical company sponsoring the trial, the completion date of the clinical trial usually signifies and marks the termination of their stakeholder status and thus any consideration of what is owed further to the research participant. (shrink)

This paper analyses the arguments for two competing ethical models of business. On the one hand there are theorists like Milton Friedman who claim that the sole social responsibility of business leaders is to maximise stockholder profits. On the other, there are those who argue that a business has ethical responsibilities to many stakeholders: employees, stockholders, retailers, customers, and so on. I argue that a business has ethical responsibility over those functions and purposes over which it has the most autonomous (...) control. The production and selling of products and services for customers is the primary purpose of a business. The generation of profit is a contingent purpose dependent on the exchange between the business and the customer. I define excellent functioning businesses as those that synergise the purposes of stakeholders to provide products and services with ethical outcomes. When ethical considerations and business interests between stakeholders conflict, the responsibility of a business to its customers has primacy over those related to business input stakeholders such as employees, stockholders and suppliers. (shrink)

Corporate social responsibility movement against labor abuses has gained momentum globally since the 1990s when many corporations adopted codes of conduct to regulate labor practices in their global supply chains. However, workers' participation in the process is relatively weak until very recently, when new worker empowerment programs are increasingly initiated. Using conceptual tool created by stakeholder theorists, this article examines dynamics and performance of worker participation in implementation process of codes of conduct through a case study of CSR practices (...) of Reebok at one of its footwear supplier factories in south China. Empirical data was collected during 2002-2005 through participant observation, in-depth interviews, and document reviews. (shrink)

Varying conceptions of and purposes for dialogue exist. Recent dialogic theorists and advocates urge exploration of forms of dialogue for learning and applying relational responsibilities within stakeholder networks. A related phenomenon has been the recent emergence of multi-stakeholder dialogues that involve parties significantly affected by major issues or concerns, such as environmental sustainability, that have complex and wide-spread implications. The extent to which these recent multi-stakeholder dialogues assume anything resembling the relationship or caring and the learning potentials (...) of dialogic goals and processes suggested by recent advocates, however, can certainly be questioned. This article explores potential directions for research on enhanced forms of multi-stakeholder dialogues that emphasize goals of dialogic learning, relationship building, and business social responsiveness within a more reflective practice of corporate citizenship. Many issues and questions concerning appropriate antecedents, processes, and outcomes for these enhanced multi-stakeholder dialogues are raised and discussed. (shrink)

Corporate social responsibility (CSR) movement against labor abuses has gained momentum globally since the 1990s when many corporations adopted codes of conduct to regulate labor practices in their global supply chains. However, workers' participation in the process is relatively weak until very recently, when new worker empowerment programs are increasingly initiated. Using conceptual tool created by stakeholder theorists, this article examines dynamics and performance of worker participation in implementation process of codes of conduct through a case study of CSR (...) practices of Reebok at one of its footwear supplier factories in south China. Empirical data was collected during 2002-2005 through participant observation, in-depth interviews, and document reviews. (shrink)

Stakeholder theories propose that managers are responsible not only for maximizing shareholder value, but also for taking into account the well being of other parties affected by corporate decisions. While the language of stakeholder theory has been taken up in industries like mining, controversy remains. Disagreements arise not only about the apportionment of costs and benefits among stakeholders, but about who counts as a stakeholder and about how "costs" and "benefits" are to be conceived. This paper investigates (...) these questions empirically by examining how managers in one mining company talk about corporate responsibilities and by analysing the explicit and implicit values systems and moral logics which inform this talk. The investigations discovered that while some claims by stakeholder groups were readily accommodated by managers, others were not. Analysis of the value frameworks employed by the mangers confirms the views of leading stakeholder theorists that stakeholder theory is grounded in the realities of management practice and behaviour. (shrink)

The migration of publicly-held companies to private status through use of private equity has been both lauded and lambasted. While agency theorists praise the public-to-private or PTP firm as being an efficient form of corporate governance, others suggest that going private allows owners and managers to extract, rather than add, value.We contribute by developing a categorization of the potential sources of value for the PTP firm. We analyze the effects of each source of value, and find that there are specific (...) negative effects for non-equity stakeholders associated with several sources. Our analysis indicates that the degree to which value is added versus extracted will vary across firms; yet, all will tend to engage in some value extraction. Policy implications are discussed. (shrink)

Zygmunt Bauman is arguably the most well-known theorist in postmodern ethics. He argues that to develop and enforce universal ethical laws or codes leads to an abdication of individual moral responsibility. Actors rely on external rules and a rational consideration of costs and benefits rather than on moral impulse. In order to recognize and act upon moral impulse, the moral agent must both recognize and understand the Other. We operationalize these ideas, applying them to the development of advanced information (...) technology (AIT) in organizations. We propose that a stakeholder theory of enabling can be used to formulate processes that will give form and voice to the Other by providing mechanisms for face-to-face interactions and dialogue. Applying the principles of affirmative postmodern ethics through an enabling stakeholder oriented system development process explicitly allows for the examination of moral concerns which might otherwise be overlooked, ignored, or silenced. (shrink)

Stakeholder theorists have generally misunderstood the nature and ramifications of the fiduciary responsibilities that corporate directors owe their stockholders. This fiduciary duty requires the exercise of care, loyalty, and honesty with regard to the financial interests of stockholders. Such obligations do not conflict with the normative goals of stakeholder theory, nor, after a century of case law that includes Dodge Bros. v. Ford, do fiduciary responsibilities owed shareholders prevent managerial policies that are generous orsensitive to other corporate stakeholders. (...) The common law recognizes a multitude of legal relationships between various corporateconstituents, and fiduciary duties are only a subset of the obligations that arise from these relationships. This article argues that statuteand case law can bring comparable legal protection to constituents other than stockholders, and suggests ways that these protectionsmight be further strengthened. Implications for management education are also discussed. (shrink)

Stakeholder theorists have generally misunderstood the nature and ramifications of the fiduciary responsibilities that corporate directors owe their stockholders. This fiduciary duty requires the exercise of care, loyalty, and honesty with regard to the financial interests of stockholders. Such obligations do not conflict with the normative goals of stakeholder theory, nor, after a century of case law that includes Dodge Bros. v. Ford, do fiduciary responsibilities owed shareholders prevent managerial policies that are generous orsensitive to other corporate stakeholders. (...) The common law recognizes a multitude of legal relationships between various corporateconstituents, and fiduciary duties are only a subset of the obligations that arise from these relationships. This article argues that statuteand case law can bring comparable legal protection to constituents other than stockholders, and suggests ways that these protectionsmight be further strengthened. Implications for management education are also discussed. (shrink)

ABSTRACT:Profit maximizers have reasons to agree with stakeholder theorists that managers may need to consider different values simultaneously in decision making. However, it remains unclear how maximizing a single value can be reconciled with simultaneously considering different values. A solution can neither be found in substantive normative philosophical theories, nor in postulating the maximization of profit. Managers make sense of the values in a situation by means of the many thick value concepts of ordinary language. Thick evaluation involves the (...) simultaneous consideration of different values: making sense of a value always involves knowing how to engage with it given the other values in the situation. This also goes for profit: maximization is only one way of engaging with the value of profit, and grasping whether maximization is appropriate involves considering other values. We discuss some consequences of our approach for stakeholder theorists and profit maximizers. (shrink)

This paper argues the case that tests of how investors value corporate social performance (CSP) based upon realised stock market returns are liable to be weak tests if markets are efficient and firms change CSP policies infrequently. We provide a theoretical explanation of why this will be the case using examples to illustrate. Subsequently, we set out an alternative theoretical framework for the purposes of investigating whether markets place a positive, or a negative, valuation on CSP, and show why this (...) is superior to tests based upon Tobin’s Q. Using US KLD data, we demonstrate that, as theorised, markets place a positive value on CSP that is not detected by conventional returns-based tests. Our conclusion is that researchers who are interested in the question of whether engagement with a corporate social responsibility agenda is a value-enhancing activity for a company (as argued by some stakeholder theorists) or value destructive (as argued by Friedman, The social responsibility of business is to increase its profits, The New York Times Magazine, 1970), need to look beyond returns-based tests to answer the research question posed. (shrink)

The neoclassical paradigm assumes that shareholders'' utility is solely a function of their wealth, and prescribes that management should act in a manner consistent with share price maximization. The stakeholder view also assumes that shareholders'' utility derives from wealth, but prescribes that managers must balance the shareholder wealth maximization objective against the rights of other constituencies. Thus, while neoclassicists and stakeholder theorists have different prescriptives for management behavior, their definitions of the shareholders'' interest are consistent — shareholders are (...) self-interested economic agents whose utility is best served by share price maximization. However, if shareholders are other-interested, and attack importance to ethical and moral values, then both the neoclassical and stakeholder view derive from invalid assumptions. In this paper, I present evidence that much shareholder behavior is ethically motivated. As a result, the basis for both the neoclassical and the stakeholder view are weakened. (shrink)

Information theorists often construe new Information and Communication Technologies (ICTs) as leveling mechanisms, regulating power relations at a distance by arming stakeholders with information and enhanced agency. Management theorists have claimed that transparency cultivates stakeholder trust, distinguishes a business from its competition, and attracts new clients, investors, and employees, making it key to future growth and prosperity. Synthesizing these claims, we encounter an increasingly common view: If corporations voluntarily adopted new ICTs in order to foster transparency, trust, and growth, (...) while embracing the redistributions of power they bring about, both corporations and stakeholders would benefit. The common view is short-sighted, however. In order to realize mutual benefit, transparency can not be conceived merely as efficient or economical. The implementation and use of new ICTs will be morally unsatisfactory unless they stably protect stakeholders. Moreover, without such protections, transparency is unlikely to produce lasting trust and growth. More specifically, corporate disclosures ought to be guided by a theory of stakeholder rights to know about threats or risks to stakeholders’ basic interests. Such rights are necessary moral protections for stakeholders in any business environment. Respect for transparency rights is not simply value added to a corporation’s line of goods and services, but a condition of a corporation’s justifiable claim to create value rather than harm, wrong, or injustice in its dealings. (shrink)

R&D collaborations between industry, government, civil society, and research ) have recently gained attention from R&D theorists and practitioners. In aiming to come to grips with their complexity, past models have generally taken a stakeholder-analytical approach based on stakeholder types. Yet stakeholder types are difficult to operationalise. We therefore argue that a processual model is more suited for studying the interaction in QHCs because it eschews matters of titles and identities. We develop such a model in which (...) the QHC is represented as a process of generating four types of value: research value, market value, political value, and societal value. We then apply this processual model in analysing real-life cases of friction in QHCs. Friction is seen, not as an interpersonal clash, but as a discrepancy between two or more value-creation processes that compete for limited resources. (shrink)

R&D collaborations between industry, government, civil society, and research (also known as ‘quadruple helix collaborations’ (QHCs)) have recently gained attention from R&D theorists and practitioners. In aiming to come to grips with their complexity, past models have generally taken a stakeholder-analytical approach based on stakeholder types. Yet stakeholder types are difficult to operationalise. We therefore argue that a processual model is more suited for studying the interaction in QHCs because it eschews matters of titles and identities. We (...) develop such a model in which the QHC is represented as a process of generating four types of value: research value, market value, political value, and societal value. We then apply this processual model in analysing reallife cases of friction in QHCs. Friction is seen, not as an interpersonal clash, but as a discrepancy between two or more value-creation processes that compete for limited resources (some overperforming while others under-performing). (shrink)

Theorists and practitioners in the fields of both Corporate Responsibility and Corporate Reputation have recently stressed the importance of taking a stakeholderperspective when researching the nature, development and impact of these concepts. While models of Corporate Reputation, such as the Reputation Quotient and SPIRIT were developed by actively engaging stakeholders in research, models of Corporate Responsibility have been developed in a more theoretical manner. There have thus been calls for the research approaches taken in reputation research to be applied to (...) the field of responsibility. This paper answers these calls and thereby provides two related outcomes: First, a conceptualisation of Corporate Responsibility is developed that draws directly upon stakeholder perceptions (in this case customers and employees of a financial institution). Secondly, a comparison between this conceptualisation and two existing models of Corporate Reputation is conducted. A formal comparison between the model of Corporate Responsibility developed in this paper and the RQ and SPIRIT models of Corporate Reputation suggests that there are considerable similarities between stakeholder conceptualisations of responsibility and models of reputation.Stakeholders may therefore not view responsibility separate from reputation, but rather as a largely overlapping concept. Questions about the causal relationship between the two concepts are also discussed. (shrink)

There is a “Pragmatist turn” visible in the field of organization science today, resulting from a renewed interest in the work of Pragmatist philosophers like Dewey, Mead, Peirce, James and others, and in its implications for the study of organizations. Following Wicks and Freeman, in the past decade Pragmatism has also entered the field of business ethics, which, however, has not been uniformly applauded in that field. Some scholars fear that Pragmatism may enhance already existing positivist and managerialist tendencies in (...) current business ethics, while others see more emancipatory potential in Pragmatism, arguing that it complements and supports stakeholder theory. In this paper, a comparison of the philosophical underpinnings of Pragmatist and Critical conceptions of business ethics is offered, concentrating on the Pragmatism of John Dewey and the Critical theory of the Frankfurt School, in particular of Axel Honneth. It is argued that these two developed along two converging lines. Along the first line, Dewey was far more skeptical and critical of capitalism than is often thought. Along the second line, the reactions to Pragmatism of Frankfurt School Critical theorists developed over time from generally hostile, to partially inclusive, to more fully integrative. At the crossroads of these converging lines a Pragmatist Critical perspective is developed and exemplified, and its implications for business ethics are outlined. (shrink)

This paper offers the first large-scale empirical study of organizational virtue as perceived by both internal and external stakeholders and of the links between these virtues and organizational outcomes such as identification, satisfaction, and distinctiveness. It takes a strategic approach to virtue ethics, one that differs from a more traditional Aristotelian concept of virtue and from Alasdair MacIntyre’s manner of distinguishing between internal and external goods. The literature review compares three different perspectives on the empirical study of organizational virtues, taken (...) by virtue theorists, POS scholars, and strategy scholars. The main study describes an empirical research undertaking that involved the analysis of 2548 usable questionnaires administered to employees and customers of seven organizations in the U.K. A structural equation model was used to test the linkages of the six dimensions of organizational virtue to satisfaction, identification, and distinctiveness. All the links were significant, with the strongest between virtue and identification. For employees, identification was driven most significantly by integrity, whereas customers’ identification was principally influenced by empathy. The empirical finding also sounds an alarm bell to the global firms who focus on creating a differentiated image based on CSR in the hope that it will lead to satisfaction. The results lead to a discussion of how companies might build favorable stakeholder perceptions of key dimensions of virtue that most shape their identification and differentiation in the marketplace. (shrink)

In recent years, several political theorists have argued that reasonable principles of justice are practice-dependent. In this paper it is suggested that we can distinguish between at least two main models for doing practice-dependent theorizing about justice, interpretivism and constructivism, and that they can be understood as based in two different conceptions of practices. It is then argued that the reliance on the notion of participants that characterizes interpretivism disables this approach from adequately addressing certain matters of justice and that (...) a better way of developing the idea of practice-dependence can be found in a constructivism that starts from the Rawlsian idea of overlapping consensus, but which shifts the focus of that approach from societies to a more open-ended category of domains, and which understands the parties to a possible overlapping consensus as stakeholders in a certain set of interconnected practices. (shrink)

The purpose of this essay is to suggest that one of the dominant modes of thought in our society is a profound mistrust and misunderstanding of the role of business. A dominant myth in society is that business occupies the moral low ground, separate from ethics or a moral point of view. This position is characterized as the “business sucks” story, and the essay shows how the enactment of this story underlies business thinking among managers and business theorists. The essay (...) concludes with a suggestion to rethink and reinvent this story along more realistic and more empowering lines. Values based capitalism, or stakeholder capitalism, offers a better way to understand the complex role that business does and should play in modern society. (shrink)

There is an urgent need to understand how private and public organisations can play a role in promoting human values such as fairness, dignity, respect and care. Globalisation, technological advance and climate change are changing work, organisations and systems in ways which foster inequality, alienation and collective risk. Against this backdrop, organisations are being urged to make their contribution to the common good, take account of the interests of multiple stakeholders, and respond ethically as well as efficiently to complex challenges (...) which transcend traditional organisational and state boundaries. Ethics, Meaningfulness, and Mutuality poses critical questions related to organisational design by challenging limits to current thinking, such as the neglect by political philosophers of markets, firms and stakeholders, or by organisational theorists of business ethics. In so doing, the book advances our understanding of the theory and practice of ethical organising. Specifically, meaningfulness and mutuality will be used to yield values and principles for a philosophy of ethical organising which includes an account of human values in morally desirable collective action, and examines the relationship of collective action to the contested concept of shared value creation. Within a philosophy of ethical organising, mutuality permits an examination of the unavoidable relational nature of collective action, whereas meaningfulness addresses fundamental human concerns for significance and leading a life we have reason to value. By addressing our status as relational beings with human needs for meaning, a philosophy of ethical organising brings critical thinking to the creation of morally informed organisational practices which are not only instrumentally beneficial for addressing wicked problems, but are normatively desirable for human flourishing. (shrink)

This article argues that shareholder primacy cannot be defended on the grounds that there is something special about the position of shareholders that grounds a right to preferential treatment on part of management. The notions of property and contract, traditionally thought to ground such a right, are now widely recognized as incapable of playing that role. This leaves shareholder theorists with two options. They can either abandon the project of arguing for their view on broadly deontological grounds and try to (...) advance consequentialist arguments instead, or they can search for other morally relevant properties that could ground shareholder rights. The most sustained argument in the latter vein is Marcoux’s attempt to show that the vulnerability of shareholders mandates that managers are their fiduciaries. I show that this argument leads to the unacceptable conclusion that it would be unethical for corporations to make incomplete contracts with nonshareholding stakeholders. (shrink)

Deliberative democracy grounds its legitimacy largely in the ability of speakers to participate on equal terms. Yet theorists and practitioners have struggled with how to establish deliberative equality in the face of stark differences of power in liberal democracies. Designers of innovative civic forums for deliberation often aim to neutralize inequities among participants through proportional inclusion of disempowered speakers and discourses. In contrast, others argue that democratic equality is best achieved when disempowered groups deliberate in their own enclaves before entering (...) the broader public sphere. Borrowing from each perspective, the authors argue that there are strong reasons to incorporate enclave deliberation among the disempowered within civic forums. They support this claim by presenting case study evidence showing that participants in such forums can gain some of the same benefits of deliberation found in more heterogeneous groups, can consider a diversity of viewpoints rather than falling into groupthink and polarization, and can persuade external stakeholders of the legitimacy of the group’s deliberations. (shrink)

An extensive literature on pragmatism and compromise, as well as their relationship to civic and political leadership, can be found in the field of Public Administration (hereafter PA). PA is broadly defined as that discipline of study addressing the development, institutionalization and reconstruction of bureaucratic-governmental organizations as well as the policies they are tasked to implement—or more “[s]imply stated . . . the management of government agencies." However, the literature is not limited to the works of PA scholars and practitioners. (...) It also encompass the writings of philosophers, and specifically philosophical pragmatists, who can contribute “a kind of methodological sophistication that either sharpens the issues at point in public controversy or discloses the absence of real or genuine issues, thus clarifying the options open for decision." In this literature, questions arise as to how unelected leaders in governmental bureaucracies are guided by pragmatism or pragmatic ideas to (i) negotiate with stakeholders to fashion appropriate compromise agreements, (ii) solve policy problems within a zone of legally mandated authority, (iii) clearly articulate the scope and content of that body of knowledge considered PA scholarship, (iv) understand the origins of PA as a distinct discipline and (v) bridge between the abstract principles offered by PA theorists and the concrete practices of bureaucratic-governmental organizations and public administrators. Classified thematically, these issues fit into four areas: first, controversy over whether administrative action is legitimate (i and ii); second, the PA’s identity crisis as a discipline (iii and iv); third, the gap between theory and practice (v); and fourth, the difficulty of integrating pragmatism and PA (i through v). (shrink)

Several feminist philosophers of science have argued that social and political values are compatible with, and may even enhance, scientific objectivity. A variety of normative recommendations have emerged regarding how to identify, manage, and critically evaluate social values in science. In particular, several feminist theorists have argued that scientific communities ought to: 1) include researchers with diverse experiences, interests, and values, with equal opportunity and authority to scrutinize research; 2) investigate or "study up" scientific phenomena from the perspectives, interests, and (...) conditions of marginalized stakeholders potentially affected by the research; and 3) make gender, ethnicity, class, and geographical location "visible," or use them as categories of analysis when appropriate. Yet, more work is needed to determine what exactly these recommendations would require, and the benefits they would yield, in specific research contexts. Using the recent development of the human papillomavirus (HPV) vaccines, we examine how these three feminist recommendations would have applied. We argue that these principles would have yielded several epistemic and social benefits in the HPV case, as well as in biomedical research more generally. That is, biomedical research guided by these principles would not only be epistemically superior, but also more socially responsible. (shrink)

From an institutional perspective we contribute to corporate governance of firms by (1) proposing a procedurally fair mechanism that is ethically desirable, and (2) experimentally testing whether procedural fairness crowds-in ethical behavior of managers (on behalf of shareholders) and workers. The experiment sees one ‘manager’ and three ‘workers’ (possibly representing three sections of the firm) co-determining an efficiency-enhancing investment which could harm some workers. Firstly, the manager claims a share of the investment surplus, then workers ‘bid’ for the investment to (...) express their willingness to satisfy the manager’s claim in case the investment is implemented. If the sum of workers’ bids is less than the manager’s claim, the investment is not implementable, which means its surplus will be lost. Workers’ behavior is ‘ethical’ when they veto unfair managerial claims, because the workers have to sacrifice own earnings. Hence, a manager’s fair claim is the ethical response to the threat of workers’ veto. If the manager claims fairly, workers’ ethical behavior is to ‘truthfully’ bid their investment evaluations; by all doing so, they equally share whatever surplus the manager has left for them. The experimental results show ethical behavior of managers in the form of fair claims. Despite these fair claims, workers behave less ethically by strategically underbidding. So the procedurally fair mechanism only partially crowds-in ethical behavior. This study should interest theorists of stakeholder management, especially those engaged in designing the rules of corporate governance. (shrink)

This conceptual paper contributes to the critique of a body of literature that will be named ‘deliberative corporate governance’ by defending non-deliberative acts performed by stakeholders. It first argues that this literature introduces to the corporation a decision-making process where it does not belong, given the corporation's economic role. This leads to an ‘efficiency constraint’ on any attempt to justify deliberation – deliberative governance theorists must show that it is the most efficient and cost-effective way to address the issues that (...) concern them. A real case example where deliberation would have been counter-productive in that regard will show that this is not the case. Building on this example, the paper uses the theory of democratic agonism to argue that non-deliberative acts should be part of governance. A sketch of managerial duties vis-à-vis such acts is attempted as well. The paper does not seek to reject deliberative corporate governance entirely, but rather to defend the importance of non-deliberative practices in addressing its theoretical concern. It makes a conceptual contribution to corporate governance theory, from which it draws practical implications for stakeholders-oriented management. (shrink)

This paper provides an alternative theoretical conceptualisation of corporate social responsibility (CSR) in order to further our understanding of prosocial organisational behaviour. We argue that consumption provides a perspective that enables theorists to escape the confines of existing CSR literature. In our view the organisation is re-imagined as an arena of consumption where employees are engaged in a quest for value, constructing and confirming their identities as consumers. Using the award-winning tour operator Laskarina Holidays as an illustrative case, it is (...) suggested that CSR can provide combinations of functional, social, emotional, epistemic and conditional value. This new perspective on CSR facilitates the coexistence of a plurality of values that are relativistically constructed and narrativised by organisational stakeholders. Our consumption paradigm provides a thought provoking means of reconciling divergent perspectives and encourages further interdisciplinary research. We argue that future research should begin, not by asking the question of why organisations assume responsibility, but by contemplating the notion of why organisations consume responsibility. (shrink)

Although Olympic athletes are celebrated for their sports achievements, they often face serious difficulties in their post-sport career employment. Factors of development that are affecting the quality of post-sport career transition of Olympic athletes are important to acknowledge in the dual career development perspective. Due to the side lining of academic activities, athletes are often not well prepared for the labor market. If they do not gain sufficient financial background in their careers, it can lead to a lack of proper (...) economic inclusion of athletes in their post-sport career employment and further impact their lives. Career transitions of athletes have been the subject of research in different aspects of DC support, but most research is linked to the student-athlete DC perspective. Therefore, the aim of our research was to examine the impact of factors directly contributing to the quality of the post-sport career transition in Slovenian elite and Olympic athletes and the social class position and employment of these athletes after the termination of their sports career. From DC support practice, we learned that although athletes often have a proper level of education, their post-sport career transitions were not successful. To fill this gap, 168 elite athletes from Slovenia were asked to complete online questionnaires. The results showed a significant contribution of education and DC support-related finances to the quality of post-sport career transition. Regarding developing a national DC model and based on empirical research, this study identifies the social class position and employment status of former elite athletes from Slovenia. It also identifies opportunities for further research on the quality of the post-sport career transitions and perspectives on DC support. Understanding how different factors contribute to the integrated development of individual athletes to reach their potential in sports, education, and their post-sport career employment is important for theorists, DC practitioners, and stakeholders working with DC athletes. To develop a sufficient mechanism, DC support providers should consider supporting education along with the financial support of athletes during their sports careers and recognizing study-training ecosystems, based on good practices to successfully transition to their post-sport careers. These findings can also be useful for athletes and their athletic triangle support network as a support in the decision-making. (shrink)

For over fifty years, evaluators have used theories of change to articulate the causal logic underpinning how an intervention is intended to bring about a desired change. From its origins in program evaluation, the approach has been adopted more widely for purposes from programme design to programme management. As theories of change continue to be used for multiple purposes, it is an opportune moment for the evaluation community - where the approach originated - to provide their perspective on the strengths (...) and limitations of the approach and its future directions. To provide these perspectives, we asked nearly thirty of the world's leading evaluators and program theorists to provide a short essay on the past, present and future of theories of change. This book presents their insights organized into five main themes: the use of theories of change in broader public policy contexts; using theories of change to establish causality; developing theories of change reflective of multiple stakeholder perspectives; using theories of change to understand wider societal change processes; and applying theories of change approaches for multiple purposes. By sharing these diverse perspectives, the book aims to both provide evaluators and emerging programme theorists with critical perspectives to inform future practice. (shrink)