Abstract
Today, there is an almost overwhelming variety and range of approaches that strive for a clear definition of stakeholder. In this article, the author aims to develop a strictly economic concept of stakeholder management. The theoretical underpinning for this endeavour is the economics of governance, which is defined as the science of the governance, management and control of cooperative relations through adaptively efficient governance structures. According to this perspective, companies are not just one form of governance of stakeholder relations; they should rather be understood as a nexus of stakeholder relations in a constitutive sense. The governance of this network is defined as a two-step process of identifying and prioritizing a team’s relevant stakeholders, which in turn are defined as resource owners who together constitute and operatively reproduce a company. From an economics of governance point of view, a firm is thus defined as a contractual nexus of stakeholder resources and stakeholder interests, whose function is the governance, i.e., the management and control of the resource owners with the aim of creating economic added value and distributing cooperative rent. It is through this theoretical lens that this article discusses the conventional theories of stakeholder management. The focus here is primarily on the widely acknowledged weaknesses of the stakeholder theory – such as the fact that it does not offer a generally recognized definition of what a stakeholder is, but also and above all on the major theoretical shortcomings with regard to identifying and prioritizing the stakeholders. Finally, this article outlines an allocation mechanism for distributing the team’s cooperative rent.
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Notes
- 1.
- 2.
See the section “Stakeholder Governance through Identification”, in which the definition will be discussed more thoroughly.
- 3.
- 4.
On this last point, see Phillips (2003).
- 5.
For a survey, see Podsakoff et al. (2000).
- 6.
For an informative discussion, see Phillips (2003, Chapters 5 and 6).
- 7.
This is the argument made by van Oosterhout et al. (2006, p. 532).
- 8.
For this criticism, see Jensen (2002).
- 9.
See also the suggestion by Hill and Jones (1992, p. 131).
- 10.
A similar argument is made by Teece et al. (1997).
- 11.
- 12.
For a stimulating discussion on this issue, see also Letza et al. (2004).
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Wieland, J. (2011). The Firm as a Nexus of Stakeholders: Stakeholder Management and Theory of the Firm. In: Brink, A. (eds) Corporate Governance and Business Ethics. Studies in Economic Ethics and Philosophy, vol 39. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1588-2_10
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