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Journal of Business Ethics

, Volume 96, Supplement 1, pp 7–9 | Cite as

Managing for Stakeholders: Trade-offs or Value Creation

  • R. Edward Freeman
Article

One of the central uses of stakeholder theory, in its original form, was as a counterpoint to the idea that corporations should be managed in the interests of shareholders. As the theory developed the debate was often framed in terms of “shareholders vs. stakeholders.” While developing “theories of the firm” is an interesting and useful project, focusing solely on “theory of the firm” obscures a more important contribution of stakeholder theory. The purpose of this brief essay is to set forth what I consider to be the central insight of stakeholder theory: the jointness of stakeholder interests.

The Basic Idea

The basic idea of “managing for stakeholders,” as I now see it, is quite simple, and I believe it is closer to the origins of the idea from Eric Rhenman and the Tavistock thinkers. In fact, Juha Nasi was correct in his assessment of the Scandinavian origins of the stakeholder idea that focus on what holds stakeholder interests together. Nasi originally suggested that we focus on...

Keywords

Stakeholder Group Stakeholder Theory Priority Rule Stakeholder Interest Joint Interest 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.University of VirginiaCharlottesvilleUSA

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