Stakeholders

The standard definition of a stakeholder is any person who has an interest in the activity of an organization, although it is normally considered to be a person who is actually affected by that activity. So owners, investors, employees, customers, and suppliers are all [Page 1453]stakeholders—but so too would be citizens living around the location of the organization's operations and the government at national and local levels. Bodies such as trades unions, consumer associations, and civic societies would also be considered to be stakeholders because the norm is to consider stakeholders as groups rather than as individuals. From this understanding of stakeholders then, stakeholder theory has been developed as a way of managing an organization. Within this theory, attempts have been made to provide frameworks by which the relevant stakeholders of an organization can be identified on the basis that stakeholders are relevant if they have invested something in the organization and are therefore subject to some risk from that organization's activities. A useful approach is to separate stakeholders into two groups: voluntary stakeholders, who choose to deal with an organization, and involuntary stakeholders, who do not choose to enter into—nor can they withdraw from—a relationship with the organization.

All the standard definitions of stakeholders are deficient, however, according to more radical theorists, as they assume that only humans can be stakeholders. These theorists claim that the natural environment is affected by the actions of an organization and is therefore a stakeholder to that organization. As environmental impact becomes of increasing concern to society as a whole, this notion is gaining recognition. A few theorists go further and claim that activities in the present have potentially significant implications for possibilities in the future and that therefore the future is also an important stakeholder. An increasing concern with sustainability is bringing this into general acceptance, although still very few would recognize the future as a stakeholder. Such notions are linked to the development in importance of such concepts as corporate social responsibility and the triple bottom line.