Abstract
Just as the ideas of stakeholder theory, stakeholder management, or stakeholder capitalism approach acceptance as a mainstream core idea in management theory, the authors want to suggest a somewhat radical rethinking of it. They believe that in almost all of its incarnations, stakeholder theory merely recapitulates some rather standard business assumptions. As a result, they believe that two problems are perpetuated—the separation of ethics and value creation and the overemphasis of stakeholder roles rather than relationships between stakeholders as real people with names and faces. In this article, the authors propose that by adopting a view of stakeholders as real people with names and faces, they can reinvigorate stakeholder research and focus their efforts on the neglected challenge of understanding how collections of idiosyncratic individuals can work together to create value in entrepreneurial firms in ways that benefit all those who are affected.
Authors’ Note: We would like to thank Jean Liedtka, Ed Hartman, Sankaran Venkataraman, Laura Dunham, Betsy Lofgren, S. Ramakrishna Velamuri, and three anonymous reviewers at JMI for their helpful comments in preparing this article.
Originally published in: Journal of Management Inquiry, 14(1), 57–69 © Sage Publications, 2005
Reprint by Springer, DOI 10.1177/1056492604270799
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Notes
- 1.
This amoral approach to business is sometimes defended by the observation that business must still operate within the bounds of the law. However, the law is too blunt an instrument to fully complete this task (Stone 1975). As numerous recent examples have demonstrated, many of the most damaging examples of stakeholder negligence or exploitation occur in that gray area between where the law ends and where personal ethics begin. Furthermore, expanding and overspecifying the law beyond its effective scope seems only to create the opportunity for new loop holes, or worse, leaves the impression that there is no need for ethics—that we just need to wait for the law to catch up. We believe that such faith in the law is naïve at best. In an entrepreneurial world where the boundaries of possibility are always in transition, there will always be opportunities for unethical, but legal, entrepreneurial decisions. This is precisely the reason that the separation thesis is so dangerous and must be challenged.
- 2.
In a working paper, Ebben and Johnson (2003) found evidence that “meaningful differences exist between small firms in terms of standard and made to order products” (p. 22). They concluded that firms that have assumed a flexible or made-to-order strategy tend to outperform firms that try to pursue efficiency strategies as well as flexibility.
- 3.
It should be noted that the purpose of this example is to illustrate how technology has been successfully used to ease the tension between individualized service and cost for stakeholders other than customers. We believe that the illustration holds notwithstanding any wider criticisms about the knock-on economic effects of the general switch to individual pension plans.
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McVea, J.F., Freeman, R.E. (2023). A Names-and-Faces Approach to Stakeholder Management: How Focusing on Stakeholders as Individuals Can Bring Ethics and Entrepreneurial Strategy Together. In: Dmytriyev, S.D., Freeman, R.E. (eds) R. Edward Freeman’s Selected Works on Stakeholder Theory and Business Ethics. Issues in Business Ethics(), vol 53. Springer, Cham. https://doi.org/10.1007/978-3-031-04564-6_9
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