Stakeholder Responsibility

Corporate Responsibility and Stakeholder Theory

With the emergence of stakeholder theory in the mid1980s and its rapid growth up to the present time, numerous writers questioned the primacy of corporate responsibility to shareholders. Writers building the foundation of stakeholder theory argued for expanding the domain of corporate responsibility beyond shareholders to include a number of critical stakeholder groups.

Over time, the legitimacy of the stakeholder perspective has grown and has influenced the direction of work in business ethics, organization theory, and the strategic management literature. Stakeholder theorists have argued for managers to acknowledge the moral “stake” of stakeholders by paying attention to stakeholders and their interests for both prudential reasons (i.e., it is good for the firm and its profitability to listen to stakeholders) and normative reasons (i.e., they argue that there are compelling moral arguments for considering stakeholder interests).

Corporate and Stakeholder Responsibility

As noted above, there has been a lack of attention to the fundamental question of whether stakeholders have moral responsibilities to firms. This is not to say that the topic of stakeholder responsibility has been completely ignored by business ethics writers. A series of articles and books were published in 2002 to 2003 that attempted to establish a conceptual foundation for stakeholder responsibility. This work emphasized the importance of stakeholders assuming responsibility for negative outcomes associated with actions directed to firms and other stakeholders and reinforced contemporary notions of responsibility in terms of accountability and responsiveness.

There are other ways of understanding responsibility in relation to stakeholders. Tracing the term back to its Latin roots (respondere), responsibility literally means to pledge back. In contrast to notions of responsibility that focus on an externally imposed obligation, this form emphasizes the idea of people and organizations choosing to pledge things to each other to foster cooperation and a better life for all. This definition of responsibility extends what it means to be a stakeholder beyond the traditional definition of stakeholders as individuals, groups, or organizations [Page 1991]potentially affected by the actions and policies of an organization. Stakeholders are not only the recipients of organizational actions but actors as well with reciprocal responsibility for the implications of their actions in relation to firms and other stakeholders.

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