The Corporation and Its Stakeholders: Classic and Contemporary Readings (Heritage)

Vll performance implications, have been fully explored. The "Redefining the Corporation" Project begins with a simple proposition: Corporations ARE what they DO. The Project aims to examine the nature of the corporation from this perspective, raising questions such as the following: How are stakeholder interests manifested and recognized, and how does corporate management deal with them? Do corporations that profess and attempt to implement "stakeholder-orientation" policies actually behave any differently or achieve any different performance outcomes than others? Do differences in stakeholder orientation among firms based in different political jurisdictions have any effects on their global competitive interaction, success or failure? How do varying legal requirements interact with voluntary stakeholder-oriented policies and practices, and with what results? These empirical questions are being raised against the background of a large theoretical and philosophical literature, and the idea of preparing a set of "benchmark" readings was conceived as a critical step in preparing for future work. Nominations for inclusion were solicited through the e-mail network, and Max Clarkson accepted the task of organizing the papers selected and preparing them for publication. Two papers are from earlier eras, and a rereading of these suggests that the problem of "redefining the corporation" has been with us for a very long time, and is likely to command attention for some years into the future.

There is an active debate over whether the traditional purpose of the corporation – to maximize profits and financial value for the benefit of shareholders – can adequately encompass the interests of all other participants or stakeholders in the corporation's activities. Since a corporation cannot operate optimally without the support of its most important stakeholders, particularly its employees and customers, finding ways of incorporating responsiveness to stakeholder needs is vital for corporate management and governance.

This anthology is designed to sharpen the debate about the role and purpose of the corporation. The debate includes such fundamental questions as: Who should be considered stakeholders? Which stakeholder interests should a corporation take into account? How should stakeholder interests be balanced against shareholder objectives (such as profits)? What changes should be made in corporate decision making and governance to reflect these new interests?

This collection of seminal articles, is divided into three parts: Shareholders and Stakeholders; Morality, Ethics and Stakeholder Theory; and Stakeholder Theory and Management Performance.

The articles date from 1916 to 1997, and are drawn from North American and European authors.

Managers as well as researchers will find this collection presented will stimulate their thinking on the role of the corporation and its responsiveness to stakeholder interests.

The volume is funded in part by a grant from the Alfred P. Sloan Foundation.

Contents 5 Foreword: Redefining the Corporation 7 The Corporation and Its Stakeholders: Classic and Contemporary Readings 9 Part 1. Shareholders and Stakeholders 21 The Changing Basis of Economic Responsibility 21 For Whom Are Corporate Managers Trustees? 39 Whose Interests Should Corporations Serve? 55 Understanding Stakeholder Thinking: Themes from a Finnish Conference 79 Part 2. Morality, Ethics and Stakeholder Theory 91 The Moral Standing of the Market 91 Business Ethics and Stakeholder Analysis 111 A Stakeholder Theory of the Modern Corporation 133 Stakeholder Thinking in Three Models of Management Morality: A Perspective with Strategic Implications 147 Part 3. Stakeholder Theory and Management Performance 181 The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications 181 Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics 213 A Stakeholder Framework for Analysing and Evaluating Corporate Social Performance 251 Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts 283 Stakeholder Mismatching: A Theoretical Problem in Empirical Research on Corporate Social Performance 323 The term stakeholders defines a group much broader than a corporation's shareholders. It includes employees, customers, suppliers, and governments, and extends to anyone who benefits from the company. There is considerable debate, given that large multifunctional corporations are now the dominant form of economic organization worldwide, about how responsive and accountable companies should be to their stakeholders. This debate includes fundamental questions such as: Who should be considered stakeholders? Which stakeholder interests should a corporation take into account? How should stakeholder interests be balanced against shareholder objectives (such as profits)? What changes should be made to corporate governance to reflect these new interests? This anthology is designed to sharpen the debate about the role and purpose of the corporation in society through the provision of seminal articles on the concept and recognition of stakeholders, and the integration of stakeholder interests into decision making. It provides a theoretical base for managerial action, and will assist researchers in planning further studies to shed light on the issues involved This anthology defines the role and purpose of the corporation in society through seminal articles on the concept of stakeholders and their recognition, and the integration of stakeholder interests into decision making. It provides a theoretical base for managerial action and will assist researchers in planning further studies to shed light on the issues involved. An anthology designed to address the role and purpose of the corporation in society through the provision of seminal articles on the concept of stakeholders and their recognition, and the integration of stakeholder interests into decision making. Edited By Max B.e. Clarkson. Includes Bibliographical References.