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The idea that corporations have stakeholders has now become commonplace in the management literature, both academic and professional. Since the publication of Freeman's landmark book, Strategic Management: A Stakeholder Approach (1984), about a dozen books and more than 100 articles with primary emphasis on the stakeholder concept have appeared. (Significant recent examples include books by Alkhafaji, 1989; Anderson, 1989: and Brummer, 1991: and articles by Brenner & Cochran, 1991; Clarkson, 1991; Goodpaster. 1991; Hill & Jones, 1992: and Wood, 1991a,b: plus numerous papers by Freeman and various collaborators, individually cited.) Stakeholder management is the central theme of at least one important recent business and society text (Carroll, 1989), and a diagram purporting to represent the stakeholder model has become a standard element of "Introduction to Management" lectures and writings.
Unfortunately, anyone looking into this large and evolving literature with a critical eye will observe that the concepts stakeholder, stakeholder model, stakeholder management, and stakeholder theory are explained and used by various authors in very different ways and supported (or critiqued) with diverse and often contradictory evidence and arguments. Moreover, this diversity and its implications are rarely discussed--and possibly not even recognized. (The blurred character of the stakeholder concept is also emphasized by Brummer, 1991.) The purpose of this article is to point out some of the more important distinctions, problems and implications associated with the stakeholder concept, as well as to clarify and justify its essential content and significance.
In the following section we contrast the stakeholder model of the corporation with the conventional input-output model of the firm and summarize our central thesis. We next present the three aspects of stakeholder theory--descriptive/empirical, instrumental, and normative--found in the literature and clarify the critical differences among them. We then raise the issue of justification: Why would anyone accept the stakeholder theory over alternative conceptions of the corporation? In subsequent sections, we present and evaluate the underlying evidence and arguments justifying the theory from the perspective of descriptive, instrumental, and normative justifications. We conclude that the three approaches to stakeholder theory. although quite different, are mutually supportive and that the normative base serves as the critical underpinning for the theory in all its forms.
THE CENTRAL THESES
We summarize our central theses here:
Thesis 1: The stakeholder...