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ABSTRACT. Stakeholder theory is an important part of modern business ethics. Many scholars argue for a normative instead of an instrumental approach to stakeholder theory. Recent examples of such an approach show that problems appear with respect to the ethical foundation as well as the specification of the norms and the relation between corporate and individual responsibilities. This paper argues for the relevance of Aristotle's ideas on ethics and politics, and especially the link between them, for stakeholder theory. An Aristotelian approach suggests that the corporation should be considered as existing to allow the decision maker, who normally is a manager, to live a complete and good life and to make decisions that involve the interests of different stakeholders. This approach leads to a number of implications regarding the role of organizational politics and the managerial function.
1. Introduction
In its most basic sense, stakeholder theory arises from the rejection of the idea that the corporation should single-mindedly strive to maximize the benefits of a single stakeholder, the shareholders. Many scholars have written about the relation between the corporation and its stakeholders (e.g. Freeman, 1984; Freeman, 1994; Evan and Freeman, 1988; Goodpaster, 1991; Langtry, 1994; Donaldson and Preston, 1995; Clarkson, 1995; Quinn and Jones, 1995, Mitchell, Agle and Wood, 1997). Donaldson and Preston (1995) distinguished between descriptive, instrumental and normative approaches to stakeholder theory. Descriptive approachesonly attempt to ascertain whether stakeholders' interests are taken into consideration by corporations or not. Instrumental approaches look to the effects of stakeholders management on corporate performance. Normative approaches are concerned with the reasons why stakeholders' interests should be taken into account. Although Aristotle has written little on economics and almost nothing on the management of business organizations (Meikle, 1994), he wrote copiously on ethics and politics. There have been earlier attempt to base theories of business ethics on Aristotles thoughts on ethics (e.g. Solomon, 1993). It is the main contention of this paper that precisely the way in which Aristotle saw ethics and politics linked can provide a new foundation for normative stakeholder theory This paper does not propose that a modern business organization is a Greek Polis. It does propose that by viewing the ethical and political situation of a manager in a corporation along the same...