Robert Edward Freeman

The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of “business” together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business.

Distinguishing “business” concerns from “ethical” values is not only an unfruitful and meaningless task, it is also an impossible endeavor. Nevertheless, fruitless attempts to separate facts from values produce detrimental second-order effects, both for theory and practice, and should therefore be abandoned. We highlight examples of exemplary research that integrate economic and moral considerations, and point the way to a business ethics discipline that breaks new groundby putting ideas and narratives about business together with ideas and narratives about ethics.

Abstract:The purpose of this paper is to suggest that at least one strain of what has come to be called “stakeholder theory” has roots that are deeply libertarian. We begin by explicating both “stakeholder theory” and “libertarian arguments.” We show how there are libertarian arguments for both instrumental and normative stakeholder theory, and we construct a version of capitalism, called “stakeholder capitalism,” that builds on these libertarian ideas. We argue throughout that strong notions of “freedom” and “voluntary action” are the best possible underpinnings for stakeholder theory, and in doing so, seek to return “stakeholder theory” to its managerial and libertarian roots found in Freeman (1984).

A quick look at what is happening in the corporate world makes it clear that the stakeholder idea is alive, well, and flourishing; and the question now is not “if ” but “how” stakeholder theory will meet the challenges of its success. Does stakeholder theory’s “arrival” mean continued dynamism, refinement, and relevance, or stasis? How will superior stakeholder theory continue to develop? In light of these and related questions, the authors of these essays conducted an ongoing dialogue on the current state and future of stakeholder thinking. Beginning with a review of research and theory that has developed since the major stakeholder theorizing efforts of the 1990s, the authors individually offer their perspectives on the key issues relevant today to stakeholder thinking, and to suggest possible approaches that might lead toward and enable the continuing development of superior stakeholder theory.

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept.

Employee monitoring has raised concerns from all areas of society – business organizations, employee interest groups, privacy advocates, civil libertarians, lawyers, professional ethicists, and every combination possible. Each advocate has its own rationale for or against employee monitoring whether it be economic, legal, or ethical. However, no matter what the form of reasoning, seven key arguments emerge from the pool of analysis. These arguments have been used equally from all sides of the debate. The purpose of this paper is to examine the seven key arguments that have been made with respect to employee monitoring. None of these arguments is conclusive and each calls for managerial and moral consideration. We conclude that a more comprehensive inquiry with ethical concern at the center is necessary to make further progress on understanding the complexity of employee monitoring. The final section of this paper sketches out how such an inquiry would proceed.

Agency theory involves what is known as the principal-agent problem, a topic widely discussed in economics, management, and business ethics today. It is a characteristic of nearly all modern business firms that the principals (the owners and shareholders) are not the same people as the agents (the managers who run the firms for the principals). This creates situations in which the goals of the principals may not be the same as the agents--the principals will want growth in profits and stock price, while agents may want growth in salaries and positions in the hierarchy. The fourth volume in the Ruffin Series in Business, this book explores the ethical consequences of agency theory through contributions by ethicists, economists, and management theorists.

The recent financial crisis has prompted questioning of our basic ideas about capitalism and the role of business in society. As scholars are calling for “responsible leadership” to become more of the norm, organizations are being pushed to enact new values, such as “responsibility” and “sustainability,” and pay more attention to the effects of their actions on their stakeholders. The purpose of this study is to open up a line of research in business ethics on the concept of “ authenticity ” as it can be applied in modern organizational life and more specifically to think through some of the foundational questions about the logic of values. We shall argue that the idea of simply “acting on one’s values” or “being true to oneself” is at best a starting point for thinking about authenticity. We develop the idea of the poetic self as a project of seeking to live authentically. We see being authentic as an ongoing process of conversation that not only starts with perceived values but also involves one’s history, relationships with others, and aspirations. Authenticity entails acting on these values for individuals and organizations and thus also becomes a necessary starting point for ethics. After all, if there is no motivation to justify one’s actions either to oneself or to others, then as Sartre has suggested, morality simply does not come into play. We argue that the idea of responsible leadership can be enriched with this more nuanced idea of the self and authenticity

The purpose of this paper is to suggest that at least one strain of what has come to be called “stakeholder theory” has roots that are deeply libertarian. We begin by explicating both “stakeholder theory” and “libertarian arguments.” We show how there are libertarian arguments for both instrumental and normative stakeholder theory, and we construct a version of capitalism, called “stakeholder capitalism,” that builds on these libertarian ideas. We argue throughout that strong notions of “freedom” and “voluntary action” are the best possible underpinnings for stakeholder theory, and in doing so, seek to return “stakeholder theory” to its managerial and libertarian roots found in Freeman

Business ethics, as a discipline, appears to be at a crossroads. Down one avenue lies more of the same: mostly philosophers takingwhat they know of ethics and ethical theory and applying it to business. There is a long tradition of scholars working in the area known as “business and society” or “social issues in management.” Most of these scholars are trained as social scientists and teach in business schools. Their raison d’etre has been admirable: trying to get executives and students of business to understand the social impacts of business and to see business in broad, societal terms.

A review of the stakeholder literature reveals that the concept of "normative core" can be applied in three main ways: philosophical justification of stakeholder theory, theoretical governing principles of a firm, and managerial beliefs/values influencing the underlying narrative of business. When considering the case of Wall Street, we argue that the managerial application of normative core reveals the imbedded nature of the fact/value dichotomy. Problems arise when the work of the fact/value dichotomy contributes to a closed-core institution. We make the distinction between open- and closed-core institutions to show how in the case of the closed-core, ethical decision-making is viewed by the institution as a separate domain from the core business of the institution. The resulting blind spot stifles meaningful exchanges with stakeholders attempting to address the need for reform. We suggest in conclusion that ethical considerations are less about casting a value judgment and more about creating a process for meaningful conversation throughout an institution and its stakeholders

1. Here’s a way to think about poverty. People who live in poverty do so because they have few opportunities to pull themselves up by their bootstraps. In fact the gap between rich and poor has increased in recent times due to the more wholesale adoption of capitalist practices around the world. The institutions of business and government conspire to give the poor a Hobson’s choice of minimal wage McJobs or unemployment. Neglect of both urban ghettoes and the rural poor has been systematic, if not conscious. The very idea of capitalism reinforces the notion that some are meant to be poor and some are meant to be rich. Such a system must be overridden at times by government to help the poor cope with their lot. The only solution is a massive redistribution of income and a system of capitalism that is severely restrained. All of this is at best highly unlikely. Even if there were such a redistribution policy we could not count on government to execute it fairly.

In the contemporary flurry of hostile corporate takeover activity, the ethics of the practice of greenmail have been called into question. The authors provide an account of greenmail in parallel with Daniel Ellsberg's conception of blackmail, as consisting of two conditions: a threat condition and a compliance condition.The analysis then proceeds to consider two questions: Is all greenmail morally wrong? Are all hostile takeovers morally wrong? The authors conclude that there is no basis for answering either question in the affirmative. While there is no cause for moral concern per se, the practices of both greenmail and hostile takeovers yield deeper and more interesting questions for the theory of corporate governance.

A number of tensions have been suggested between stakeholder theory and strategic management (SM). Following a brief review of the histories of stakeholder theory and mainstream SM, we argue that many of the tensions are more apparent than real, representing different narratives about stakeholder theory, SM, business, and ethics. Part of the difference in these two theoretical positions is due to the fact that they seek to solve different problems. However, we suggest how there are areas of overlap, and we argue that some of the tensions may, instead, provide interesting ways to put the two areas of scholarship and practice together. We maintain that SM and stakeholder theory could mutually benefit from a more pragmatist philosophy.

This book is a unique collection of essays by the leading scholars in business ethics. The purpose of the volume is to examine the emergence of business ethics as an important element of managerial practice and as an integral area of scholarship. The four lead essays--by Norman Bowie, Kenneth Goodpaster, Thomas Donaldson, and Ezra Bowen--are examples of some of the best thinking about the role of ethics in business. These essays examine such issues as the nature of scholarship and knowledge in business ethics, how ethics is a central factor in managerial leadership, the complexities of ethics in multinational and multicultural settings, and the problems of ethical literacy and moral debate in a free society. Each lead essay develops several themes which are then explored by other prominent thinkers, including Robert Solomon, Richard DeGeorge, and Joanne Cuilla.

Lack of specificity around stakeholder identity remains a serious obstacle to the further development of stakeholder theory andits adoption in actual practice by business managers. Nowhere is this shortcoming more evident than in stakeholder theory’s treatment of the constituency known as “community.”In this paper we attempt to set forth what we call “the Problem of Community” as indicative of the definitional problems of stakeholdertheory. We then begin the process of gaining greater specificity around our notions of community and the role of community in stakeholder theory and management. In doing so, we identify the emergence of two fairly new forms of community that we believe are particularly relevant to the stakeholder theorist and practicing manager. These two new variants of community—the virtual advocacy group and the community of practice—extend the notion of community in new directions, which have strikingly different implications for stakeholder theory and practice.

The purpose of this paper is to draw out and make explicit the assumptions made in the treatment of technology within business ethics. Drawing on the work of Freeman (1994, 2000) on the assumed separation between business and ethics, we propose a similar separation exists in the current analysis of technology and ethics. After first identifying and describing the separation thesis assumed in the analysis of technology, we will explore how this assumption manifests itself in the current literature. A different stream of analysis, that of science and technology studies (STS), provides a starting point in understanding the interconnectedness of technology and society. As we will demonstrate, business ethicists are uniquely positioned to analyze the relationship between business, technology, and society. The implications of a more complex and rich definition of lsquotechnologyrsquo ripple through the analysis of business ethics. Finally, we propose a pragmatic approach to understanding technology and explore the implications of such an approach to technology. This new approach captures the broader understanding of technology advocated by those in STS and allows business ethicists to analyze a broader array of dilemmas and decisions.

In this article, we first provide evidence that Scandinavian contributions to stakeholder theory over the past 50 years play a much larger role in its development than is presently acknowledged. These contributions include the first publication and description of the term “stakeholder”, the first stakeholder map, and the development of three fundamental tenets of stakeholder theory: jointness of interests, cooperative strategic posture, and rejection of a narrowly economic view of the firm. We then explore the current practices of Scandinavian companies through which we identify the evidence of relationships to these historical contributions. Thus, we propose that Scandinavia offers a particularly promising context from which to draw inspiration regarding effective company-stakeholder cooperation and where ample of examples of what is more recently referred to as “creating shared value” can be found. We conclude by endorsing the expression “Scandinavian cooperative advantage” in an effort to draw attention to the Scandinavian context and encourage the field of strategic management to shift its focus from achieving a competitive advantage toward achieving a cooperative advantage

We review both the aspects of values-related research that complicate ideations of what we ought to do, as well as the psychological impediments to forming beliefs about the way things are. We find that more traditional moral theories are without solid empirical footing in the psychology of human values. Consequently, we revise the notion of values to align with their socially symbolic utility in self-affirmation and reformulate our understandings of moral agency to allow for the practicalities of context, circumstance, and connectedness. We close by discussing the research and practical implications for these revisions

In this paper, we review two seemingly unrelated debates. In business ethics, the argument is about values: are they universal or emergent? In entrepreneurship, it is about opportunities – are they discovered or constructed? In reality, these debates are similar as they both overlook contingency. We draw insight from pragmatism to define contingency as possibility without necessity. We analyze real-life narratives and show how entrepreneurship and ethics emerge from our discussion as parallel streams of thought.