Chapter 3 The Stakeholder Approach to Business Society

Chapter 3 The Stakeholder Approach to Business, Society, and Ethics © 2012 South-Western, a part of Cengage Learning 1

Stakeholders Stakeholder • Any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization. • Stakeholder is a variant of the concept of stockholder– an investor/owner of businesses. © 2012 South-Western, a part of Cengage Learning 2

Who are Business Stakeholders? Stockholders Customers Employees Community Competitors Business Stakeholder Groups Special-Interest Groups Suppliers Society Media General Public © 2012 South-Western, a part of Cengage Learning 33

Production and Managerial Views of the Firm © 2012 South-Western, a part of Cengage Learning 4

Stakeholder View of the Firm © 2012 South-Western, a part of Cengage Learning 5

Who are Business Stakeholders? Primary stakeholders • Have a direct stake in the organization and its success. Secondary stakeholders • Have a public or special interest stake in the organization that is more indirect. © 2012 South-Western, a part of Cengage Learning 6

Social Stakeholders Primary social stakeholders Secondary social stakeholders Shareholders and investors Government regulators Employees and managers Civic institutions Customers Social pressure groups Local communities Media and academic commentators Suppliers and other business partners Trade bodies Competitors © 2012 South-Western, a part of Cengage Learning 7

Nonsocial Stakeholders Primary nonsocial stakeholders Secondary nonsocial stakeholders Natural environment Environmental interest groups Future generations Animal welfare organizations Nonhuman species © 2012 South-Western, a part of Cengage Learning 8

Who Are Our Stakeholders? © 2012 South-Western, a part of Cengage Learning 9

What Responsibilities Does a Firm Have to its Stakeholders? • What responsibilities does a firm have in its relationships with all stakeholders? • Responsibilities are ü Economic ü Legal ü Ethical ü Philanthropic © 2012 South-Western, a part of Cengage Learning 10

The “Clarkson Principles” of Stakeholder Management © 2012 South-Western, a part of Cengage Learning 11