I’ve wondered for a long time how the belief in Shareholder Value<\/em> In a previous post, I wrote about Art Kleiner\u2019s \u2018Age of corporate In 1979, A.B.Carroll<\/a> wrote:<\/p>\n The modern era of social responsibility, however, may be marked by Stakeholder Theory came into being a decade later. Freeman Chester Barnard [who] argued that the purpose of the corporation was They note that Igor By the mid 1970s the term \u201ccorporate social responsibility\u201d had The phrase corporate social responsibility has been used in so many Indeed Sethi represents an early attempt to resolve this divergence of views Throughout this phase, an important distinction began to develop. As Mitchell In 1978 William C. Frederick observed that business and society scholarship That is, some scholars and practitioners began promoting the view that business It was in this context that Freeman & Reed<\/a> made an attempt to resolve these We have hesitated to suggest particular strategies for directors that In other words, there is no simple formula that managers or directors can apply As noted above, Mitchell et al<\/i><\/a> (1997) made an important contribution The Narrow Sense of Stakeholder<\/i>: Any identifiable group or and<\/p>\n The Wide Sense of Stakeholder<\/i> Any identifiable group or individual Mitchell et al<\/i><\/a>\u2019s contribution was twofold. First they attempted empirical research that answers these questions: Are present descriptions Unfortunately, it appears their call for empirical research in this area has Clarkson<\/a> Jones<\/a> In my next post in this series, I will look at the origins of Agency Theory Origins and development of Corporate Social Responsibility and Stakeholder Theory I’ve wondered for a long time how the belief in Shareholder Value came to dominate corporate thinking. I started reading around this topic to try to understand how this came to be. Clearly it is related to what each of us see as the purpose […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-194","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts\/194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=194"}],"version-history":[{"count":0,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts\/194\/revisions"}],"wp:attachment":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\ncame to dominate corporate thinking. I started reading around this topic to
\ntry to understand how this came to be. Clearly it is related to what each of
\nus see as the purpose of corporations.<\/p>\n
\ndominance\u2019. We\u2019ve been arguing about the purpose of corporations
\never since.. Do they exist solely to make a profit and serve their shareholder
\nowners or do they have a social responsibility to other stakeholders as well?<\/p>\n
\nHoward R. Bowen\u2019s 1953 publication of Social Responsibility of the
\nBusinessman<\/i>, considered by many to be the first definitive book on the subject
\n\u00c9 By the mid-1950s, discussions of the social responsibilities of businesses
\nhad become so widespread that Peter Drucker chided businessmen: \u201cYou might
\nwonder, if you were a consciencious newspaper reader, when the managers of American
\nbusiness had any time for business\u201d (p 497)<\/p><\/blockquote>\n
\n& Reed<\/a> suggest the term \u2018stakeholder\u2019 was \u201ccoined
\nin an internal memorandum at the Stanford Research Institute in 1963\u201d
\nwhile they trace discussions of the social responsibilities of the modern corporation
\nback to Berle
\nand Means<\/a> in 1932 who \u201cwere worried about the \u2018degree of prominence
\nentitling (the corporation) to be dealt with as a major social institution.\u2019\u201d
\nand <\/p>\n
\nto serve society, and that the function of the executive was to instil this
\nsense of moral purpose in the corporation\u2019s employees. (Ibid.<\/i>)<\/p><\/blockquote>\n
\nAnsoff<\/a> included a discussion of the new [stakeholder theory] concept in
\nhis 1965 book, commented that systems theorists \u201cled by Russell Ackoff
\n\u2018rediscovered\u2019 stakeholder analysis\u201d in the mid-1970s and
\nin 1975 Dill<\/a>
\n\u201csought to move the stakeholder concept form the periphery of corporate
\nplanning to a central place.\u201d (Freeman & Reed, again)<\/p>\n
\ncome into common use (eg Sethi<\/a>
\nin 1975) and was used to cover the same ground as stakeholder theory. Also by
\nthis time, issues of definition and the terms meaning different things to different
\npeople had come into play:<\/p>\n
\ndifferent contexts that it has lost all meaning. Devoid of an internal structure
\nand content, it has come to mean all things to all people. Business executives,
\nacademic scholars, government regulators, and social activists view the corporation’s
\nsocial role within their respective frames of reference, thereby allowing the
\nevaluator maximum discretion as to the amount of funds expended, the nature
\nof the activities engaged in, and the types of groups whose needs are responded
\nto. (Sethi<\/a>)<\/p><\/blockquote>\n
\nby introducing the concept Corporate Social Performance. Carroll<\/a>
\ntakes this further by developing a three-dimensional model in which Corporate
\nSocial Performance (CSP) is based on both Corporate Social Responsibility (CSR1<\/sub>)
\nand Corporate Social Responsiveness (CSR2<\/sub>)<\/p>\n
\net al<\/i><\/a> note<\/p>\n
\nwas in transition from a moral focus on social responsibility (CSR1<\/sub>)
\nto an amoral focus on social responsiveness (CSR2<\/sub>). When stakeholder
\ntheory focuses only on issues of legitimacy, it acquires the fuzzy moral flavor
\nof CSR1<\/sub>. Focusing only on stakeholder power, however, as several
\nmajor organizational theories would lead us to do, yields the amorality and
\nself-interested action focus of CSR2<\/sub>. Instead we propose a merger.\n<\/p><\/blockquote>\n
\nhad to take stakeholders into account, not for any moral responsibility they
\nhad to these stakeholders, but rather because they had to manage the risk to
\nthe firm due to the influence activist group now had the power to exercise.
\nSocial performance was seen as a way of demonstrating the company\u2019s responsiveness
\nto social trends.<\/p>\n
\ndilemmas in part by focusing on the political nature of stakeholder power and
\nits implications for corporate governance:<\/p>\n
\nfind themselves in one of the conflict situations we have explored. Our goal
\nhas been, rather, to counterbalance the great weight of attention expended on
\nchanging the (perceived) status quo and mandating certain types of board structure
\nof behavior with attention placed on a realistic appraisal of the current situation
\nand a sensitive elaboration of the potential lines of action currently available.\n<\/p><\/blockquote>\n
\nto determining what they need to do. Rather they have to exercise their judgment
\nin each situation and on each issue. <\/p>\n
\nin this phase as well. In Corporate Social Responsibility (and its derivatives
\n\u2014 CSR2<\/sub> and CSP) the question had been around whether to take
\na wide or narrow view of a corporation\u2019s responsibilities (ie did they
\nextend beyond economic and legal?) while in stakeholder theory there was a similar
\ndilemma regarding the definition of \u2018stakeholder\u2019. The business
\nrationalists defined stakeholder narrowly as \u2018stockholder\u2019 while
\nother views include <\/p>\n
\nindividual on which the organization is dependent for its continued survival.
\n(Freeman
\n& Reed<\/a>,)<\/p><\/blockquote>\n
\nwho can affect the achievement of an organization\u2019s objectives or whi
\nis affected by the achievement of an organization\u2019s objectives. (Freeman
\n& Reed<\/a>)<\/p><\/blockquote>\n
\nto answer the questions \u201cWho is a stakeholder and what is at stake?\u201d
\n(Mitchell et al<\/i><\/a>, 1997) by identifying stakeholders and their influence
\nalong the dimensions of Power; Legitimacy, Urgency and Salience. Secondly
\nthey make the important call for<\/p>\n
\nof stakeholder attributes adequate? Do the inferences we make herein hold when
\nexamining real stakeholder-manager relationships? Are there models off interrelationships
\namong the variables identified (and possible others) that reveal more subtle,
\nbut perhaps more basic, systematics? (Ibid.<\/i>)<\/p><\/blockquote>\n
\nlargely gone unheeded. <\/p>\n
\nclaims to present results from a 10 year research program but rather presents
\nconclusions without data and, at best, sketchy details of his methodology. <\/p>\n
\n(1995) cites studies by Alexander
\nand Buchman<\/a> (1978), Cochran
\n& Wood<\/a> (1984) and Sturdivant
\n& Ginter<\/a> (1977) but concludes \u201cnone has been based on a credible
\ntheory.\u201d<\/p>\n
\nand Shareholder Value. <\/p>\n","protected":false},"excerpt":{"rendered":"