Journal of Business Ethics 19 (4):319 - 334 (1999)

Abstract
The conflict between agency and stakeholder theories of the firm has long been entrenched in organizational and management literature. At the core of this debate are two competing views of the firm in which assumptions and process contrast each other so sharply that agency and stakeholder views of the firm are often described as polar opposites. The purpose of this paper is to show how agency theory can be subsumed within a general stakeholder model of the firm. By analytically deconstructing the assumptions of agency theory, it is argued that agency theory: (1) must include a recognition of stakeholders; (2) requires a moral minimum to be upheld, which places four moral principles above the interests of any stakeholders, including shareholders; (3) consists of contradictory assumptions about human nature and which give rise to the equally valid assumptions of trust, honesty and loyalty to be infused into the agency relationship. In this way, stakeholder theory is argued to be the logical conclusion of agency theory. Empirical hypotheses are presented as a means to substantiate this claim.
Keywords Philosophy   Ethics   Business Education   Economic Growth   Management
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Reprint years 2004
DOI 10.1023/A:1005880031427
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References found in this work BETA

Ethical Theory and Business.T. L. Beauchamp & N. E. Bowie - 1988 - Journal of Business Ethics 7 (11):846-880.
Property Rights.Lawrence Becker - 1979 - Mind 88 (351):469-472.
Agents for the Truly Greedy.Lisa Newton - 1992 - In Norman E. Bowie & R. Edward Freeman (eds.), Ethics and Agency Theory: An Introduction. New York et al.: Oxford University Press. pp. 97-113.

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Citations of this work BETA

The Stakeholder Model Refined.Yves Fassin - 2009 - Journal of Business Ethics 84 (1):113-135.

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