Stakeholders

Citation

Dahl Rendtorff, J. (2011), "Stakeholders", Society and Business Review, Vol. 6 No. 1, pp. 99-100. https://doi.org/10.1108/17465681111105869

The specialists in stakeholder theory Robert A. Philips and R. Edward Freeman have done a very good job in making this collection of what they consider as the most important articles in stakeholder theory. The book is central reference collection that is indispensable for the scholar and student in stakeholder theory. The collection begins with the presentation of stakeholder theory with some of Freemans most important articles. We are introduced to the theory by an excerpt from the foundational book in the field by Freeman Strategic Management: A Stakeholder Approach (1984) and we are introduced to how stakeholder theory is applied to corporation governance and future directions. After this the book contains an article by Blair that addresses the important question of whose interests should be served by the corporation. She also discusses the question of how we can justify that the corporation is run not only in the interest of owners and shareholders but also takes into account the interests of a broader number of stakeholders, including employees, consumers, local community, etc. With the important article from 1995 by Jones about instrumental stakeholder theory the collection of articles goes into the debate about how to justify stakeholder theory as instrumental strategic management. Moreover, the works of Donaldsen and Preston about instrumental, descriptive and normative stakeholder theory and by Michell et al. about stakeholder salience and how to chose and categorize stakeholders according to urgency, power and legitimacy are printed in the anthology. Together with the article by Philips on stakeholder fairness these works constitute the essential conceptual body of stakeholder theory.

After this the anthology contains articles that go into different particular aspects of stakeholder theory, for example network theory and stakeholders, stakeholder influence strategies, stakeholder bargaining power and stakeholder orientation, convergence of stakeholder theories, corporate performance and stakeholder management, balancing stakeholder needs and partnerships with stakeholders. We are then faced with the important criticism of stakeholder theory by Michael Jensen that asks the question whether the firm really can have more than one single objective function which is to make profits and serve shareholders. This criticism marks the reply to stakeholder theory by the traditional theories of finance and strategic management and it makes us reflect about whether stakeholder theory really can be a mainstream strategic approach. The libertarian defense of stakeholder theory by Philips and Freeman as well as the article about what stakeholder theory is not serves further conceptual clarification but it also shows that the philosophical foundation of stakeholder theory is still rather undecided. Philips's important article about stakeholder legitimacy shows how stakeholder theory situates the firm in society and this that can be seen as a normative reply to Jensen's criticism about the problem of the single objective in relation to stakeholder management. The articles about stakeholder groups can also be seen as a reply to the problem of the objective function of the firm that is also discussed in articles about the discussion of the corporate objective function revisited by Sundaram and Inkpen from 2004 and in the article about stockholder management by Walsh. And we can also see the article about the property rights theory as a reply to this debate about the objective function.

What we then find in the anthology is an extremely important article by Mcvea and Freeman about the names and faces approach to stakeholder theory that we can say represents a very innovation development of the theory because it really takes seriously the integration of ethics and management that is so central to stakeholder theory and is further the works about ethics and stakeholder theory by Jones, Felps and Bigley as well as the article by Goodstein and Wicks about making business ethics a two‐way conversation in stakeholder theory. Finally, we see also a development of this approach in the article of Freeman about managing for stakeholders and about the relation between economic values and stakeholder values by Mary Sully de Luque et al.

All in all this is a well‐selected collection of the field of stakeholder management that contains all the most important articles and positions of the field of stakeholder theory. However, many problems of stakeholder theory still remain: what can we do to make stakeholder more operational for management? What is the real philosophical foundation of stakeholder theory? Is it really nothing more than a pragmatic justification of management? And this may imply that stakeholder theory is after all not really a theory. How do we really select stakeholders and how can it be that despite all the efforts stakeholder theory has not yet become central reference in strategic management? And what are the hidden problems of stakeholder management? Stakeholder theorists still have a lot of work to do to convince management scholars so that we can have stakeholder theory as the first and foremost reference for MBA‐education. The book helps us to move in this direction.