{"id":79,"date":"2025-03-29T17:23:58","date_gmt":"2025-03-29T12:23:58","guid":{"rendered":"https:\/\/sagadenov.com\/?p=79"},"modified":"2025-03-29T19:32:09","modified_gmt":"2025-03-29T14:32:09","slug":"the-stakeholder-theory-by-r-edward-freemandraft","status":"publish","type":"post","link":"https:\/\/sagadenov.com\/?p=79","title":{"rendered":"Stakeholder Theory: The State of the Art by R. Edward Freeman"},"content":{"rendered":"\n

(why business needs more than just profit.)<\/em><\/p>\n\n\n\n

The main idea<\/h2>\n\n\n\n

We\u2019re usually told: \u201cProfit is the main thing. Everything else comes later.\u201d
But this book says the opposite. Stakeholder Theory<\/em> offers a different view of capitalism: business is not about transactions \u2014 it\u2019s about relationships. It doesn\u2019t exist for a single metric, but to create value for everyone it touches or depends on.<\/p>\n\n\n\n

At the center of this theory are not shareholders, but all stakeholders: employees, customers, suppliers, local communities, ecosystems. Companies that consider all of them live longer, build trust, and grow sustainably.<\/p>\n\n\n\n

\n

\u201cWe need a new narrative about business, one that reflects the way business can and should work.\u201d
\u2014 R. Edward Freeman<\/p>\n<\/blockquote>\n\n\n\n

\n\n\n\n

What\u2019s the core idea?<\/h2>\n\n\n\n

If you act only in the interest of investors, you might get short-term gains. But in the long run, it leads to toxicity, loss of trust, and broken relationships.<\/p>\n\n\n\n

The stakeholder approach is not about \u201cbeing nice\u201d \u2014 it\u2019s about surviving and evolving in a complex, interconnected world. It\u2019s a strategy where business works with people, not against them.<\/p>\n\n\n\n

\n\n\n\n

Six ideas that shift the business mindset<\/h2>\n\n\n\n

Trust matters more than contracts<\/strong>
Things hold together not on paper, but through honest interaction.<\/p>\n\n\n\n

Listen to everyone your decisions touch<\/strong>
Even if they\u2019re silent. Often, the quietest voices matter most.<\/p>\n\n\n\n

Take responsibility, don\u2019t look for someone to blame<\/strong>
Ethics isn\u2019t a burden \u2014 it\u2019s maturity. It\u2019s how you act deliberately.<\/p>\n\n\n\n

People are not logic and numbers<\/strong>
They have fears, hopes, inner contradictions. That needs to be seen, not ignored.<\/p>\n\n\n\n

Value is created daily, not on a schedule<\/strong>
Dialogue, care, involvement \u2014 this is where real innovation comes from.<\/p>\n\n\n\n

Competition is not war<\/strong>
It\u2019s a space for choice and growth. Not a zero-sum game, but mutual development.<\/p>\n\n\n\n

\n\n\n\n

What stood out<\/h2>\n\n\n\n
    \n
  • The principle of complexity<\/strong>\n
      \n
    • People aren\u2019t always rational \u2014 and that\u2019s their strength. Understanding this is the foundation of wise leadership.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
    • Stakeholder vs. shareholder is a false choice<\/strong>\n
        \n
      • You don\u2019t have to pick sides. A good business balances interests instead of pitting them against each other.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
      • Connection to Kant and ethical theory<\/strong>\n
          \n
        • It\u2019s not just about \u201cbeing better.\u201d It\u2019s about understanding why business exists as a human practice.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n
          \n\n\n\n

          Key nuances that are easy to miss<\/h2>\n\n\n\n
            \n
          • The stakeholder model is not just a management tool<\/strong>\n
              \n
            • It\u2019s not a checklist or a CSR patch. It\u2019s a normative framework \u2014 a philosophy of business centered on values.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
            • Critique of shareholder capitalism<\/strong>\n
                \n
              • The authors make a solid case for why focusing only on shareholder profits is an unstable model \u2014 historically, ethically, and practically.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
              • Value creation > Value extraction<\/strong>\n
                  \n
                • The job of business is to create value, not just extract it. This changes everything \u2014 from strategy to everyday decisions.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
                • Integration with other disciplines<\/strong>\n
                    \n
                  • The book weaves together philosophy, economics, organizational theory, even politics. It\u2019s not detached theory \u2014 it\u2019s a bridge between business and society.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
                  • Reflection prompts<\/strong>\n
                      \n
                    • A set of useful questions:\n
                        \n
                      • \u2014 Who are the stakeholders we\u2019ve forgotten?<\/li>\n\n\n\n
                      • \u2014 Whose perspective could change our decision?<\/li>\n\n\n\n
                      • \u2014 Where are we using the language of control instead of dialogue?<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n
                        \n\n\n\n

                        Conclusion<\/h2>\n\n\n\n

                        Business is not a set of relationships around profit. It is relationships instead of profit. Money follows. When interactions are honest and sustainable, value emerges naturally.<\/p>\n\n\n\n

                        Ethics doesn\u2019t get in the way of decision-making \u2014 it gives it structure. In uncertainty, values are the compass \u2014 not the trendiest framework, but a sense of what\u2019s right.<\/p>\n\n\n\n

                        If someone is silent, it doesn\u2019t mean they\u2019re unaffected. Silence often comes from lack of power. You need to hear more than just the loudest voices.<\/p>\n\n\n\n

                        Listening to stakeholders is cheaper than fixing the damage later. Conflict, resistance, and reputational loss are what you get when you ignore those involved.<\/p>\n\n\n\n

                        Responsibility isn\u2019t about saying sorry \u2014 it\u2019s about seeing ahead. Not reacting to crises, but anticipating who might be hurt by your choices.<\/p>\n\n\n\n

                        Competition without respect quickly turns into destruction. Without trust and ground rules, it stops being a game and becomes a war. And when that happens, all that\u2019s left are burned-out markets and burned-out people.<\/p>\n\n\n\n

                        \n\n\n\n

                        R. Edward Freeman, Jeffrey S. Harrison, Andrew C. Wicks, Bidhan L. Parmar, Simone de Colle \u2013 Stakeholder Theory: The State of the Art (2010)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

                        (why business needs more than just profit.) The main idea We\u2019re usually told: \u201cProfit is the main thing. Everything else comes later.\u201dBut this book says the opposite. Stakeholder Theory offers a different view of capitalism: business is not about transactions \u2014 it\u2019s about relationships. It doesn\u2019t exist for a single metric, but to create value […]<\/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-79","post","type-post","status-publish","format-standard","hentry","category-about-my-read-books"],"_links":{"self":[{"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/posts\/79","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sagadenov.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=79"}],"version-history":[{"count":13,"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/posts\/79\/revisions"}],"predecessor-version":[{"id":129,"href":"https:\/\/sagadenov.com\/index.php?rest_route=\/wp\/v2\/posts\/79\/revisions\/129"}],"wp:attachment":[{"href":"https:\/\/sagadenov.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=79"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sagadenov.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=79"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sagadenov.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=79"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}