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    Fiduciary: Stakeholder Theory Is A Theory of

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    Izzuddin Zaki
    Stakeholder theory argues that a corporation has obligations to groups beyond its shareholders. It identifies stakeholders as groups that can affect or be affected by a corporation, such as employees, customers, suppliers, and local communities. The theory recommends that management consider the interests of all stakeholders, not just shareholders, and integrate both resource-based and market-based views of the firm. Stakeholders are classified as either primary, engaging directly with the corporation through economic transactions, or secondary, being indirectly affected or able to influence the corporation.

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    Fiduciary: Stakeholder Theory Is A Theory of

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    Izzuddin Zaki
    192 views3 pages
    Stakeholder theory argues that a corporation has obligations to groups beyond its shareholders. It identifies stakeholders as groups that can affect or be affected by a corporation, such as employees, customers, suppliers, and local communities. The theory recommends that management consider the interests of all stakeholders, not just shareholders, and integrate both resource-based and market-based views of the firm. Stakeholders are classified as either primary, engaging directly with the corporation through economic transactions, or secondary, being indirectly affected or able to influence the corporation.

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    Stakeholder Theory

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    Stakeholder theory argues that a corporation has obligations to groups beyond its shareholders. It identifies stakeholders as groups that can affect or be affected by a corporation, such as employees, customers, suppliers, and local communities. The theory recommends that management consider the interests of all stakeholders, not just shareholders, and integrate both resource-based and market-based views of the firm. Stakeholders are classified as either primary, engaging directly with the corporation through economic transactions, or secondary, being indirectly affected or able to influence the corporation.

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    192 views3 pages

    Fiduciary: Stakeholder Theory Is A Theory of

    Uploaded by

    Izzuddin Zaki
    Stakeholder theory argues that a corporation has obligations to groups beyond its shareholders. It identifies stakeholders as groups that can affect or be affected by a corporation, such as employees, customers, suppliers, and local communities. The theory recommends that management consider the interests of all stakeholders, not just shareholders, and integrate both resource-based and market-based views of the firm. Stakeholders are classified as either primary, engaging directly with the corporation through economic transactions, or secondary, being indirectly affected or able to influence the corporation.

    Copyright:

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization.

    It was originally detailed by R. Edward Freeman in the book Strategic Management: A Stakeholder Approach, and identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address the "Principle of Who or What Really Counts." In the traditional view of the firm, the shareholder view, the shareholders or stockholders are the owners of the company, and the firm has a binding fiduciary duty to put their needs first, to increase value for them. Stakeholder theory argues that there are other parties involved, including employees,customers, suppliers, financiers, communities, governmental bodies, political groups, trade associations, and trade unions. Even competitors are sometimes counted as stakeholders - their status being derived from their capacity to affect the firm and its stakeholders. The nature of what is a stakeholder is highly contested (Miles, 2012), with hundreds of definitions existing in the academic literature (Miles, 2011). The stakeholder view of strategy integrates both a resource-based view and a market-based view, and adding a socio-political level. This view of the firm is used to define the specific stakeholders of a corporation (the normative theory (Donaldson) of stakeholder identification) as well as examine the conditions under which these parties should be treated as stakeholders (the descriptive theory of stakeholder salience)

    Types of stakeholders
    A corporate stakeholder is that which can affect or be affected by the actions of the business as a whole.

    Any action taken by any organization or any group might affect those people who are linked with them in the private sector. For examples these are parents, children, customers, owners, employees, associates, partners, contractors, and suppliers, people that are related or located nearby. Primary Stakeholders - usually internal stakeholders, are those that engage in economic transactions with the business. (For example stockholders, customers, suppliers, creditors, and employees) Secondary Stakeholders - usually external stakeholders, are those who - although they do not engage in direct economic exchange with the business - are affected by or can affect its actions. (For example the general public, communities, activist groups, business support groups, and the media)

    Stakeholders:

    Stakeholder's concerns:

    [2]

    Government

    taxation, VAT, legislation, employment, truthful reporting, diversity, legalities, externalities.

    Employees

    rates of pay, job security, compensation, respect, truthful communication.

    Customers

    value, quality, customer care, ethical products.

    Suppliers

    providers of products and services used in the end product for the customer, equitable business opportunities.

    Creditors

    credit score, new contracts, liquidity.

    Community

    jobs, involvement, environmental protection, shares, truthful communication.

    Trade Unions quality, worker protection, jobs.

    Owner(s)

    profitability, longevity, market share, market standing, succession planning, raising capital, growth, social goals.

    Investors

    return on investment, income.

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