A Stakeholder Theory of the Modern Corporation
Stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization. In the traditional view of the firm, the shareholder view(the only one recognized in business law in most countries), the shareholders or stockholder are the owners of the company and the firm has a binding fiduciary duty to put their needs firt to increase profit for them.
In older input-output models of the corporation, the firm change the in put of investors, employess, and suppliers into salable outputs wich costumers buy, thereby returning some capital benefit to firm. By this models firm only address the need and desires of those four parties: investors, employees, suppliers, and customers.
The stakeholder view of strategy is an instrumental theory of the corporation, integrating both the resource-based view as well as the market-based view, and adding a socio-political level. This view of the firm is used to define the specific stakeholders of a corporation (the normative theory (Donaldson) of stakeholder identification) as well as examine the conditions under which these parties should be treated as stakeholders (the descriptive theory of stakeholder salience). These two questions make up the modern treatment of Stakeholder Theory.
Firm need to see about stakeholder importance cause the maximize profit of firm is support by all stakeholder in firm. Consider as most important share holder without consider as important stakeholder has a risk(stake) in performance of live firm isn’t all right. General of Firm isn’t personal possession, now firm possession by many share holder and its management command to professional. Some of Shareholder enclose their financial capital for market speculation and they aren’t care about policies of firm, this shareholder isn’t have importance to take care of firm persistence.
Importance of all side equalized by firm purpose, which one is applied Corporate Social Responsibility(CSR) become integral share of firm strategy. CSR take a various component of firm responsibility for stakeholder and firm responsibility to increase the profit. For example car producer who try to render efficient fuel using, friendly of environment, decrease global warning effect, and beneficial for consumer. In financial crisis, society realize this product they need at now efficient and friendly of environment. This statement can be increase the selling and profit, high profitabilities can be increase prosperity firm employee.