Stakeholder Value Perspective

Knowledge Center

• About
• Home
• Dictionary
• Encyclopedia
• Question?
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

Emphasizing responsibility over profitability. Explanation of Stakeholder Value Perspective.

Introduction

Over the last 200 years, the influence of business corporations on our society has grown quickly and tremendously. No wonder that the corporate purpose they should serve is discussed by many people with different backgrounds, including:

• Academics in the fields of economics, law, political science and sociology,
• Business ethics and philosophic scientists,
• Political parties, labor unions, various communities, environmentalists, and
• Media and the general public.

In countries with a market economy it is generally agreed that companies should pursue economic profitability. However many people would likewise agree that organizations also have certain social responsibilities. Profitability and responsibility can and should be combined in an ideal world, however it is clear that they are at least partially contradictory.

On the one hand, businesses must make profits for surviving. Specifically, corporations must provide a higher return on their equity capital than would be realized by the shareholders if they deposited their money on a risk-free bank account. The profits that are made create trust from investors and are usually reflected in higher share-prices, which make it easier for the company to realize its goals. The profits are not only a result, but also a source of corporate competitive health and wealth.

On the other hand, companies are networks of parties and people working together towards a shared goal and not merely 'economic machines'. Employees nowadays represent a major part of the value of any company (intellectual capital). To motivate people to work hard for the interests of the company, a level of trust must be built with them. Likewise it is important for trust to develop between the organization and its external environment (customers, suppliers, government, and interest groups). Such trust can only grow from the perceived secure feeling, that the interests of all individuals and stakeholders are taken into account.
 

The Stakeholder Value Perspective

The Stakeholder Value Perspective (also: Stakeholder Values Perspective) emphasizes responsibility over profitability and sees organizations primarily as coalitions which must serve all parties involved.

Stakeholder Value advocates believe that the success of an organization should be measured by the satisfaction among all stakeholders. And they see stakeholder management both as an end/purpose and as a means. They believe that social responsibility is an organizational matter. Also they claim that society is best served by organizations pursuing joint interests and economic symbiosis.

A company is not an instrument of its shareholders. But it is a coalition between various resource suppliers, with the intention of increasing their common wealth. Advocates of this perspective refuse to give shareholders a higher moral claim on the organization than providers of other resources.

Recognizing the moral claims of stakeholders other than the shareholders introduces other values than financial value in the spectrum of what needs to be pursued by the organization. Stakeholder management is not merely instrumental to create shareholder value, but normative. By posessing strongly motivated employees, and by nurturing high levels of trust with all parties surrounding the organization, the pursuing of the joint interests of all stakeholders is not only more fair, but it will also maximize the health of the society.

Stakeholder Value Perspective Forum   Reconciling Profitability and Responsibility Here’s a list of ways in which CEOs can deal with ...           High-Commitment High-Performance (HCHP) Leaders How can CEOs under fierce pressure from capital ma...         Begin a new topic

Stakeholder Value Perspective Special Interest Group Special Interest Group

Stakeholder Value Perspective Education & Events Find Trainings, Seminars and Events

Best Practices - Stakeholder Value Perspective Premium

Expert Tips - Stakeholder Value Perspective Premium   Stakeholder Capitalism (Freeman) Professor Freeman has recently published a formida... Usage (application): Stakeholder Management       7 Perspectives of Looking at Stakeholders Ian Mitroff, Emeritus Professor from the Universit... Usage (application): Clustering Stakeholders       Doing Well by Doing Good? Since a long time ago it has been argued whether t... Usage (application): The Correlation Between Corporate Social Responsibility and Corporate Financial Performance       The Maturity Stages of Corporate Responsibility Simon Zadek provides a useful best practice five-s... Usage (application): Organizational Development, Corporate Responsibility Maturity       Reasons Why People are Doing Voluntary Work Voluntary work has long been seen as an activity p... Usage (application): Expectancy Theory, Corporate Social Responsibility, Stakeholder Perspective, Volunteers

Resources - Stakeholder Value Perspective Premium The Purpose of Business: Stockholder versus Stakeholder Theories This presentation elaborates on the objectives and... Usage (application): Stakeholder Analysis; Stakeholder Commitment   What is a Business For? Charles Handy is critical of overemphasis on share... Usage (application): Definition of Corporate Succes   Strategy, Society and CSR Presentation about the relationship between CSR an... Usage (application): CSR Strategy, Competitive Advantage, Strategic Corporate Social Responsibility, Strategy and Society   The Strategic Role of Public Relations and Communication in Business Presentation about the role public relations and c... Usage (application): Public Relations, Strategic Management, Corporate Responsibility, Stakeholder Management, Stakeholder Analysis   The Dawn of Conscious Capitalism This presentation provides an introduction into th... Usage (application): Conscious Capitalism, Value-driven Consumer, Socially Responsible Investing, Corporate Responsibility   CSR Implementation and Communication Model (Schmeltz) Because Corporate Social Responsibility is a value... Usage (application): CSR Communication, CSR Implementation, CSR Strategy, Corporate Identity, Corporate Values, CSR Stages,   Introduction Into Welfarenomics This presentation elaborates on the concept of wel... Usage (application): Welfarenomics   Ethics in Corporate Governance This presentation is about the role that ethics pl... Usage (application): Ethics, Corporate Governance   Introduction to Stakeholder Management David Butter explains what stakeholders are and th... Usage (application): Introduction to Stakeholder Management     News about Stakeholder Perspective         News about Stakeholders Responsibility         Videos about Stakeholder Perspective         Videos about Stakeholders Responsibility         Presentations about Stakeholder Perspective         Presentations about Stakeholders Responsibility         More about Stakeholder Perspective         More about Stakeholders Responsibility

Compare with the Stakeholder Value Perspective:  Shareholder Value Perspective  |  Value Based Management  |  Strategic Intent  |  Ashridge Mission Model  |  Core Competence  |  Clarkson Principles  |  Intrinsic Stakeholder Commitment  |  Stakeholder Analysis  |  Stakeholder Mapping  |  Strategic Stakeholder Management  |  Moral Purpose  |  Seven Surprises  |  Spiral Dynamics

Return to Management Hub: Change & Organization  |  Communication & Skills  |  Decision-making & Valuation  |  Ethics & Responsibility  |  Finance & Investing  |  Human Resources  |  Knowledge & Intangibles  |  Leadership  |  Marketing  |  Program & Project Management  |  Strategy  |  Supply Chain & Quality

More Management Methods, Models and Theory