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Your analysis should include thoughtful consideration of the MBA




Your analysis should include thoughtful consideration of the MBA programme threads. You will find information and outcomes from the event in the following articles;? Ezigbo, O. & Bassey, O. (2010) ?Oil spill?environment practitioners want compensation from shell? [Online]. Available from: (Accessed: 1 July 2010).;In addition, be sure to incorporate ideas from the following article in your project;? Donaldson, T. & Preston, L. (1995) ?The stakeholder theory of the corporation: concepts, evidence, and implications?, The Academy of Management Review, 20 (1), pp.65?91.;In this article, the author discusses the concept of organizational stakeholders and the implications for management.;Your Final Project analysis should address the following;? Conduct research and provide a brief organisational and historical background on Shell as it relates to its operations, the extent of its globalisation, and its reputation for ethics and corporate social responsibility.;? Identify and discuss how each of the three stakeholders in this wicked problem might make sense of it in different ways. For example, an investor may see the cleanup effort as something that might impact their dividends and returns. However, that same person may also see the cleanup effort as an important fight to minimise harmful impacts on the environment.;? Discuss ways of constructing an understanding of this event that may be productive for the different stakeholders. Identify outcomes that would be reinforced or in conflict with this sense-making.;? In the context of leadership research and established leadership theories, discuss how each of the three stakeholders can have a personal impact on how the situation or problem might be addressed. Identify a way to create a shared understanding of the wicked problem.;Submit approximately 2,000 words in which you;? Identify the key issues in the situation;? Conduct research and provide organisational and historical background on Shell as it relates to its operations, the extent of its globalisation, and its reputation for ethics and corporate social responsibility.;? Research related literature on being a leader, e.g., leadership and sense-making, transactional leadership, transformational leadership, charismatic leadership and theories on gender and leadership;? Summarise and demonstrate understanding of related literature;? Assess the situation from three primary stakeholder perspectives;o The Shell CEO;o A local Nigerian Shell employee;o A Shell Investor;? Identify and discuss the various motivations of each of the three stakeholders in this situation. For example, an investor may be motivated by dividends and returns, but also may have personal concern for the environment.;Submit approximately 4,000 words in which you address the following;? Synthesise theories and models from the Module readings and literature (that address the issue in the situation).;? Utilise effective discussion, analysis and conclusions showing critical thinking to propose solutions and address the following questions;o Discuss how each of the three stakeholders might make sense of how the situation or problem should be addressed. How would your response or articulation of the problem vary for each of these stakeholders?;o Describe, compare and contrast, and evaluate the various approaches to leadership discussed throughout the Module, as well as what you have learned about yourself to being a leader in this particular situation. Provide alternative directions for bringing resolution based on several different perspectives.;? Provide correct referencing and citation.;In each submission, be sure to cite and reference examples from the Module textbook and journal articles presented in this Module as well as resources you identify from your own research. Your submissions should demonstrate critical analysis of the topic and a coherent application of related theories.;Please Mention the reference wherever is possible. Also it very important follow the outlines.;Attachment Preview;A2010-1-2410481.stakeholdertheoryofthecorporation,concepts,....pdf;The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications;Author(s): Thomas Donaldson and Lee E. Preston;Source: The Academy of Management Review, Vol. 20, No. 1 (Jan., 1995), pp. 65-91;Published by: Academy of Management;Stable URL:;Accessed: 11/05/2010 13:15;Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at; JSTOR's Terms and Conditions of Use provides, in part, that unless;you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you;may use content in the JSTOR archive only for your personal, non-commercial use.;Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at;;Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed;page of such transmission.;JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of;content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms;of scholarship. For more information about JSTOR, please contact;Academy of Management is collaborating with JSTOR to digitize, preserve and extend access to The Academy;of Management Review.;;?;Academy of Management;1995, Vol. 20, No. 1, 65-91.;Review;T;THE STAKEHOLDER HEORY F THE;O;C;CORPORATION: ONCEPTS, EVIDENCE;AND IMPLICATIONS;THOMAS DONALDSON;Georgetown University;LEE E. PRESTON;University of Maryland;The stakeholder theory has been advanced and justified in the management literature on the basis of its descriptive accuracy, instrumental power, and normative validity. These three aspects of the theory;although interrelated, are quite distinct, they involve different types;of evidence and argument and have different implications. In this;article, we examine these three aspects of the theory and critique and;integrate important contributions to the literature related to each. We;conclude that the three aspects of stakeholder theory are mutually;supportive and that the normative base of the theory-which includes;the modern theory of property rights-is fundamental.;If the unity of the corporate body is real, then there is reality;and not simply legal fiction in the proposition that the managers of the unit are fiduciaries for it and not merely for its;individual members, that they are... trustees for an institution [with multiple constituents] rather than attorneys for the;stockholders.;E. Merrick Dodd, Jr.;Harvard Law Review, 1932;The idea that corporations have stakeholders has now become commonplace in the management literature, both academic and professional.;Since the publication of Freeman's landmark book, Strategic Management: A Stakeholder Approach (1984), about a dozen books and more than;100 articles with primary emphasis on the stakeholder concept have appeared. (Significant recent examples include books by Alkhafaji, 1989;Anderson, 1989, and Brummer, 1991, and articles by Brenner && Cochran;1991;Clarkson, 1991, Goodpaster, 1991, Hill && Jones, 1992;and Wood;1991a,b, plus numerous papers by Freeman and various collaborators;The development of this article benefited greatly from discussions held at the Conference on Stakeholder Theory at the University of Toronto, May 1993, and from the specific;comments of many people, including Professors Aupperle, Carroll, Clarkson, Halal, Freeman, Jones, and Sethi.;65;66;Academy of Management Review;January;individually cited.) Stakeholder management is the central theme of at;least one important recent business and society text (Carroll, 1989), and a;diagram purporting to represent the stakeholder model has become a;standard element of "Introduction to Management" lectures and writings.;Unfortunately, anyone looking into this large and evolving literature;with a critical eye will observe that the concepts stakeholder, stakeholder;model, stakeholder management, and stakeholder theory are explained;and used by various authors in very different ways and supported (or;critiqued) with diverse and often contradictory evidence and arguments.;Moreover, this diversity and its implications are rarely discussed-and;possibly not even recognized. (The blurred character of the stakeholder;concept is also emphasized by Brummer, 1991.) The purpose of this article;is to point out some of the more important distinctions, problems, and;implications associated with the stakeholder concept, as well as to clarify;and justify its essential content and significance.;In the following section we contrast the stakeholder model of the;corporation with the conventional input-output model of the firm and summarize our central thesis. We next present the three aspects of stakeholder theory -descriptive/empirical;instrumental, and normative;found in the literature and clarify the critical differences among them. We;then raise the issue of justification: Why would anyone accept the stakeholder theory over alternative conceptions of the corporation? In subsequent sections, we present and evaluate the underlying evidence and;arguments justifying the theory from the perspective of descriptive, instrumental, and normative justifications. We conclude that the three approaches to stakeholder theory, although quite different, are mutually;supportive and that the normative base serves as the critical underpinning for the theory in all its forms.;THE CENTRAL THESES;We summarize our central theses here;Thesis 1: The stakeholder theory is unarguably descriptive. It presents a model describing what the corporation;is. It describes the corporation as a constellation of cooperative and competitive interests possessing intrinsic;value. Aspects of this model may be tested for descriptive accuracy: Is this model more descriptively accurate;than rival models? Moreover, do observers and participants, in fact, see the corporation this way? The model;can also serve as a framework for testing any empirical;claims, including instrumental predictions, relevant to;the stakeholder concept (but not for testing the concept's;normative base).;Thesis 2: The stakeholder theory is also instrumental. It;1995;Donaldson and Preston;67;establishes a framework for examining the connections;if any, between the practice of stakeholder management and the achievement of various corporate performance goals. The principal focus of interest here has;been the proposition that corporations practicing stakeholder management will, other things being equal, be;relatively successful in conventional performance terms;(profitability, stability, growth, etc.).;Thesis 3: Although Theses 1 and 2 are significant aspects;of the stakeholder theory, its fundamental basis is normative and involves acceptance of the following ideas;(a) Stakeholders are persons or groups with legitimate;interests in procedural and/or substantive aspects of corporate activity. Stakeholders are identified by their interests in the corporation, whether the corporation has;any corresponding functional interest in them.;(b) The interests of all stakeholders are of intrinsic value.;That is, each group of stakeholders merits consideration;for its own sake and not merely because of its ability to;further the interests of some other group, such as the;shareowners.;Thesis 4: The stakeholder theory is managerial in the;broad sense of that term. It does not simply describe;existing situations or predict cause-effect relationships;it also recommends attitudes, structures, and practices;that, taken together, constitute stakeholder management. Stakeholder management requires, as its key;attribute, simultaneous attention to the legitimate interests of all appropriate stakeholders, both in the establishment of organizational structures and general policies and in case-by-case;decision;making. This;requirement holds for anyone managing or affecting;corporate policies, including not only professional managers, but shareowners, the government, and others.;Stakeholder theory does not necessarily presume that;managers are the only rightful locus of corporate control;and governance. Nor does the requirement of simultaneous attention to stakeholder interests resolve the longstanding problem of identifying stakeholders and evaluating their legitimate "stakes" in the corporation. The;theory does not imply that all stakeholders (however;they may be identified) should be equally involved in;all processes and decisions.;The distinction between a stakeholder conception of the corporation;and a conventional input-output perspective is highlighted by the con-;68;Academy of Management Review;January;trasting models displayed in Figures 1 and 2. In Figure 1, investors;employees, and suppliers are depicted as contributing inputs, which;the "black box" of the firm transforms into outputs for the benefit of;customers. To be sure, each contributor of inputs expects to receive appropriate compensation, but the liberal economics, or "Adam Smith" interpretation, of this model in long-run equilibrium is that input contributors, at the margin, receive only "normal" or "market competitive;benefits (i.e., the benefits that they would obtain from some alternative;use of their resources and time). Individual contributors who are particularly advantaged, such as possessors of scarce locations or skills, will;of course, receive "rents," but the rewards of the marginal contributors;will only be "normal." As a result of competition throughout the system;the bulk of the benefits will go to the customers. (There is, of course, a;Marxist-capitalist version of this model in which both the customer and;the investor arrows are reversed, and the object of the game is merely to;produce benefits for the investors. This interpretation now seems to be;confined almost exclusively to the field of finance.);The stakeholder model (Figure 2) contrasts explicitly with the inputoutput model in all its variations. Stakeholder analysts argue that all;persons or groups with legitimate interests participating in an enterprise;do so to obtain benefits and that there is no prima facie priority of one set;of interests and benefits over another. Hence, the arrows between the firm;and its stakeholder constituents run in both directions. All stakeholder;relationships are depicted in the same size and shape and are equidistant;from the "black box" of the firm in the center. The distinctive features of;this conception, as contrasted with conventional input-output conceptions, will become apparent as our analysis proceeds.;This summary of the stakeholder theory and our discussion throughout this article refer specifically to the theory's application to the investorFIGURE 1;Contrasting Models of the Corporation: Input-Output Model;Investors;Suppliers;-;FIRM;Employee;-*;ustomersg;Donaldson and Preston;1995;69;FIGURE 2;Contrasting Models of the Corporation: The Stakeholder Model;Governments;Investors;Suppliers;FIRM;Customers;Employe;Communities;Trade;Associations;Poitical;Groups;owned corporation. Although stakeholder concepts have been applied in;other settings (e.g., government agencies and social programs), these;situations are fundamentally different, and simultaneous discussion of a;variety of possible stakeholder relationships leads, in our view, to confusion rather than clarification. The critical corporate stakeholder issues;both in theory and in practice, involve evidentiary considerations and;conceptual issues (e.g., the meaning of property rights) unique to the;corporate setting.;It is also worth noting at the outset that the extent to which the stakeholder theory is understood to represent a controversial or challenging;approach to conventional views varies greatly among market capitalist;economies. These differences are highlighted in a recent issue of The;Economist (1993: 52);In America, for instance, shareholders have a comparatively big say in the running of the enterprises they own, workers... have much less influence. In many European countries, shareholders have less say and workers more... [I]n;Japan... managers have been left alone to run their companies as they see fit-namely for the benefit of employees and;of allied companies, as much as for shareholders.;ALTERNATIVESPECTSOF STAKEHOLDERHEORY;A;T;DESCRIPTIVE/EMPIRICAL;INSTRUMENTAL,ND NORMATIVE;A;One of the central problems in the evolution of stakeholder theory has;been confusion about its nature and purpose. For example, stakeholder;theory has been used, either explicitly or implicitly, for descriptive purposes. Brenner and Cochran (1991: 452) offered a "stakeholder theory of;the firm" for "two purposes: to describe how organizations operate and to;help predict organizational behavior." They contrasted this "theory,;70;Academy of Management Review;January;which they developed only in outline form, with other "theories of the;firm," but they did not ask whether the various theories cited have comparable purposes.;In fact, different theories have different purposes and therefore different validity criteria and different implications. For example, according;to Cyert and March (1963), the neoclassical theory of the firm attempts to;explain the economic principles governing production, investment, and;pricing decisions of established firms operating in competitive markets.;In contrast, their behavioral theory of the firm attempts to explain the;process of decision making in the modern firm in terms of goals, expectations, and choice-making procedures. Aoki's (1984) cooperative game;theory of the firm attempts to explain internal governance, particularly;the balance between owners' and workers' interests. In contrast to all of;these contributions, transaction cost theory attempts to explain why firms;exist (i.e., why economic activities are coordinated through formal organizations rather than simply through market contacts) (Coase, 1937;Williamson & Winter, 1991). (Although all of these theories are put forward as "positive" or "scientific" conceptions, there is a tendency for them;to be used for normative purposes as well.);The stakeholder theory differs from these and other "theories of the;firm" in fundamental ways. The stakeholder theory is intended both to;explain and to guide the structure and operation of the established corporation (the "going concern" in John R. Commons' famous phrase). Toward that end it views the corporation as an organizational entity through;which numerous and diverse participants accomplish multiple, and not;always entirely congruent, purposes. The stakeholder theory is general;and comprehensive, but it is not empty, it goes well beyond the descriptive observation that "organizations have stakeholders." Unfortunately;much of what passes for stakeholder theory in the literature is implicit;rather than explicit, which is one reason why diverse and sometimes;confusing uses of the stakeholder concept have not attracted more attention.;The stakeholder theory can be, and has been, presented and used in;a number of ways that are quite distinct and involve very different methodologies, types of evidence, and criteria of appraisal. Three types of;uses are critical to our analysis.;Descriptive/Empirical;The theory is used to describe, and sometimes to explain, specific;corporate characteristics and behaviors. For example, stakeholder theory;has been used to describe (a) the nature of the firm (Brenner & Cochran;1991), (b) the way managers think about managing (Brenner & Molander;1977), (c) how board members think about the interests of corporate constituencies (Wang & Dewhirst, 1992), and (d) how some corporations are;actually managed (Clarkson, 1991, Halal, 1990, Kreiner & Bhambri, 1991).;1995;Donaldson and Preston;71;Instrumental;The theory, in conjunction with descriptive/empirical;data where;available, is used to identify the connections, or lack of connections;between stakeholder management and the achievement of traditional;corporate objectives (e.g., profitability, growth). Many recent instrumental studies of corporate social responsibility, all of which make explicit or;implicit reference to stakeholder perspectives, use conventional statistical methodologies (Aupperle, Carroll, && Hatfield, 1985;Barton, Hill;Sundaram, 1989;Cochran && Wood, 1984;Cornell && Shapiro, 1987;McGuire, Sundgren, & Schneeweis, 1988, Preston && Sapienza, 1990;Preston, Sapienza, & Miller, 1991). Other studies are based on direct observation and interviews (Kotter && Heskett, 1992;O'Toole, 1985, see also;O'Toole, 1991). Whatever their methodologies, these studies have tended;to generate "implications" suggesting that adherence to stakeholder principles and practices achieves conventional corporate performance objectives as well or better than rival approaches. Kotter and Heskett (1992);specifically observed that such highly successful companies as HewlettPackard, Wal-Mart, and Dayton Hudson-although;very diverse in other;ways-share;a stakeholder perspective. Kotter and Heskett (1992: 59);wrote that "[a]lmost all [their] managers care strongly about people who;have a stake in the business-customers;employees, stockholders, suppliers, etc.;Normative;The theory is used to interpret the function of the corporation, including the identification of moral or philosophical guidelines for the operation and management of corporations. Normative concerns dominated the;classic stakeholder theory statements from the beginning (Dodd, 1932);and this tradition has been continued in the most recent versions (Carroll;1989, Kuhn && Shriver, 1991;Marcus, 1993). Even Friedman's (1970) famous;attack on the concept of corporate social responsibility was cast in normative terms.;Contrasting/Combining;Approaches;Each of these uses of stakeholder theory is of some value, but the;values differ in each use. The descriptive aspect of stakeholder theory;reflects and explains past, present, and future states of affairs of corporations and their stakeholders. Simple description is common and desirable in the exploration of new areas and usually expands to generate;explanatory and predictive propositions. (All such activities shall be;called descriptive for our purposes.) Instrumental uses of stakeholder theory make a connection between stakeholder approaches and commonly;desired objectives such as profitability. Instrumental uses usually stop;short of exploring specific links between cause (i.e., stakeholder management) and effect (i.e., corporate performance) in detail, but such linkage;72;Academy of Management Review;January;is certainly implicit. The much-quoted Stanford Research Institute's (SRI);definition of stakeholders as "those groups without whose support the;organization would cease to exist" (SRI, 1963, quoted in Freeman, 1984: 31);clearly implies that corporate managers must induce constructive contributions from their stakeholders to accomplish their own desired results;(e.g., perpetuation of the organization, profitability, stability, growth).;In normative uses, the correspondence between the theory and the;observed facts of corporate life is not a significant issue, nor is the association between stakeholder management and conventional performance;measures a critical test. Instead, a normative theory attempts to interpret;the function of, and offer guidance about, the investor-owned corporation;on the basis of some underlying moral or philosophical principles. Although both normative and instrumental analyses may be "prescriptive;(i.e., they may express or imply more or less appropriate choices on the;part of decision makers), they rest on entirely different bases. An instrumental approach is essentially hypothetical, it says, in effect, "If you;want to achieve (avoid) results X, Y, or Z, then adopt (don't adopt) principles and practices A, B, or C." The normative approach, in contrast, is not;hypothetical but categorical, it says, in effect, "Do (Don't do) this because;it is the right (wrong) thing to do." Much of the stakeholder literature;including the contributions of both proponents and critics, is clearly normative, although the fundamental normative principles involved are often unexamined.;A striking characteristic of the stakeholder literature is that diverse;theoretical approaches are often combined without acknowledgement.;Indeed, the temptation to seek a three-in-one theory-or at least to slide;easily from one theoretical base to another-is;strong. Clarkson (1991;349), for example, asserted an explicit connection among all three when;he concluded that his stakeholder management model represents a new;framework for "describing, evaluating, and managing corporate social;performance.;All three types of theory are also to be found in the work of Freeman;whom many regard as the leading contributor to the stakeholder literature. In his original treatise, he asserted that changing events create a;descriptive fit for the theory;Just as the separation of the owner-manager-employee;required a rethinking of the concept of control and private;property as analyzed by Berle and Means (1932),so does the;emergence of numerous stakeholder groups and new strategic;issues require a rethinking of our traditional picture of the;firm.. We must redraw the picture in a way that accounts;for the changes. (1984:24);At the same time, he also endorsed the theory's instrumental basis.;We should, he noted, "explore the logic of this concept in practical terms;i.e., in terms of how organizations can succeed in the current and future;business environment" (1984: 25). Instrumental concerns are also reflected;1995;Donaldson and Preston;73;in Freeman's extensive discussion of stakeholder management implementation techniques, both in his 1984 treatise and in other papers (Freeman && Gilbert, 1987;Freeman & Reed, 1983). In a later work, however;Evan and Freeman (1988: 97) justified stakeholder theory on normative;grounds, specifically its power to satisfy the moral rights of individuals.;They asserted that the theory of the firm must be reconceptualized "along;essentially Kantian lines." This means each stakeholder group has a;right to be treated as an end in itself, and not as means to some other end;and therefore must participate in determining the future direction of the;firm in which [it has] a stake.;The muddling of theoretical bases and objectives, although often understandable, has led to less rigorous thinking and analysis than the;stakeholder concept requires. To see the significance of the distinctions;among descriptive, instrumental, and normative uses of the stakeholder;concept, consider the current controversy over the special privileges of;top managers in large corporations, particularly in connection with mergers and acquisitions. There is considerable evidence that in the burst of;large corporate takeovers during the 1980s, share values typically rose for;acquired firms and fell for acquiring firms. Many observers have speculated that self-serving managerial activity accounts for both results;(Jensen, 1989, Weidenbaum & Vogt, 1987). The acquired firms gain in;value because, prior to the takeover, they were burdened by inefficient;self-serving managers, and the acquiring firms lose in value because the;impetus for the acquisition was not return on investment for owners but;ego gratification and career advancement for their top managers. If this;analysis is accurate, and if managers' nests are often feathered in other;ways (e.g., salaries, bonuses) at the expense of shareowners, then it is;descriptively true that managers' interests have priority over those of;other stakeholders, including shareowners. But we cannot move directly;from an is claim-the;de facto priority of managers' interests-to;an;ought claim in either instrumental or normative contexts. Moreover, even;if it were true that higher paid managers did, in fact, achieve higher;levels of profitability (thus meeting instrumental criteria), it would still;not follow that higher pay/profit results were normatively justifiable. (Witness the near-universal condemnation of the income/profit achievements;of the 19th-century robber barons.);THEPROBLEM F JUSTIFICATION;O;The underlying epistemiological issue in the stakeholder literature is;the problem of justification: Why should the stakeholder theory be accepted or preferred over alternative conceptions? Until this question is;addressed, the distinctions among empirical, instrumental, and normative approaches can be papered over. Moreover, the answer to this question must be related to the distinct purpose that the theory is intended to;serve. That is, reasons to accept the stakeholder theory as a descriptive;74;Academy of Management Review;January;account of how managers behave, or of how the business world is constituted, are different from reasons to accept the stakeholder theory as a;guide for managerial behavior, and so on.;The stakeholder theory is justified in the literature, explicitly or implicitly, in ways that correspond directly to the three approaches to the;theory set out in the previous section: descriptive, instrumental, and normative. Descriptive justifications attempt to show that the concepts embedded in the theory correspond to observed reality. Instrumental justifications point to evidence of the connection between stakeholder;management and corporate performance. Normative justifications appeal;to underlying concepts such as individual or group "rights," "social contract," or utilitarianism. (Brummer's recent survey of this literature ignores descriptive issues but emphasizes "power and performance," i.e.;instrumental, and "deontological," i.e., normative, arguments, cf. Brummer, 1991.);In our view, the three aspects of the stakeholder theory are nested;within each other, as suggested by Figure 3. The external shell of the;theory is its descriptive aspect, the theory presents and explains relationships that are observed in the external world. The theory's descriptive;accuracy is supported, at the second level, by its instrumental and predictive value, if certain practices are carried out, then certain results will;be obtained. The central core of the theory is, however, normative. The;descriptive accuracy of the theory presumes the truth of the core normative conception, insofar as it presumes that managers and other agents;act as if all stakeholders' interests have intrinsic value. In turn, recognition of these ultimate moral values and obligations gives stakeholder;management its fundamental normative base. In the following sections;FIGURE 3;Three Aspects of Stakeholder Theory;DsNormative;\ \\;esript;1995;Donaldson and Preston;75;we survey the evidence and argument involved in each of these approaches to the justification of the stakeholder theory.;DESCRIPTIVEUSTIFICATIONS;J;There is ample descriptive evidence, some of which has already been;cited, that many managers believe themselves, or are believed by others;to be practicing stakeholder management. Indeed, as early as the mid1960s, Raymond Baumhart's (1968) survey of upper-level managers revealed that about 80 percent regarded it as unethical management behavior to focus solely in the interest of shareowners and not in the interest;of employees and customers. Since then, other surveys asking similar;questions about the stakeholder sensitivity of managers have returned;similar results (Brenner && Molander, 1977;Posner & Schmidt, 1984). Ongoing empirical studies by both Clarkson (1991) and Halal (1990) attempt;to distinguish firms that practice stakeholder management from those;that do not, and both investigators found significant numbers of firms in;the first category. Managers may not make explicit reference to "stakeholder theory," but the vast majority of them apparently adhere in practice to one of the central tenets of the stakeholder theory, namely, that;their role is to satisfy a wider set of stakeholders, not simply the shareowners. (Note, however, that the 171 managers surveyed by Alkhafaji;1989, did not believe that the corporate governance roles of any stakeholders, including shareowners, should be increased. Perhaps not surprisingly, they strongly favored increased dominance of corporate governance by management).;Another kind of descriptive justification for the stakeholder theory;stems from the role it plays as t


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