THEORETICAL FOUNDATIONS OF STAKEHOLDER MANAGEMENT

Ecole: UNIVERSITY OF TECHNOLOGY OF CAPE TOWN
Niveau: BAC + 6
In his best selling book The State We're In, Will Hutton argues for a democratic political economy that relates to the whole of European society. He criticises business for being short-termist and relentless in pursuit of some of the highest financial returns in the world: “Companies are the fiefdoms of their Boards and sometimes of just their Chairmen; and companies are run as pure trading operations rather than productive organisations which invest, innovate and develop human capital” (Hutton 1996).
In contrast of this view of companies being dominated only by the idea of improving returns for shareholders, the concept of stakeholding advocates a democratic approach to business which values relationships with a range of stakeholders.
The term stakeholder refers to groups or individuals who have an interest or stake in an entity such as an organisation, community or country. In corporate terms, a company's stakeholders include employees, suppliers, members of the local community and customers. Each of these groups can affect or are affected by the “actions, decisions, policies, practices or goals of the organisation” (Freeman 1984).
There is no firm consensus on the meaning of stakeholder theory. It has been described variously as being based on Keynesian economics (Hutton 1996) communitarianism (rights matched by responsibilities) (Burkitt and Ashton 1996) and the Kantian notion of duty (as opposed to utilitarianism) (Burkitt and Ashton 1996).