Take a second to name as many stakeholders as you can that a business should recognize (or just cheat and look at the ones that I listed below)….
According to stakeholder theory, which was developed by R. Edward Freeman, there are four stakeholders that are normally addressed by businesses: investors, employees, suppliers, and customers. These are the ones that you probably guessed. The theory goes on to list a number of other stakeholders though. These include governmental bodies, political groups, trade associations, trade unions, communities, associated corporations, prospective employees, prospective customers, the public at large, and competitors. These might not come to mind right away, and most people wouldn’t even think of one of these other stakeholders. However, business decisions should be made with these unheralded parties in mind. But how much should they cater to their needs in each individual decision? This is an essential question that business ethics attempts to answer. In his theory, Freeman argues that the role of business is to benefit its stakeholders, which will in turn benefit the business. Ideally, this would be done through innovation that helps align the interests of stakeholders. If this is accomplished, then the business doesn’t have to deal with tradeoffs that pit stakeholders against each other. In the end, the fundamental driver of business behavior is the stakeholders of that business. Because of this, I am fascinated in the identification of stakeholders, and then their subsequent effect on the behavior of businesses.