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Stakeholder Theory vs Stockholder Theory - what's the difference?
In this video Professor Thomas M. Jones discusses the difference between Stakeholder Theory and Stockholder Theory.
Well stakeholder theory, the biggest difference is normative, and the reaon for that is, as I have said before, everybody has to deal with stakeholders.
Managers that don't believe that stakeholders have any intrinsic value have to deal with them anyway.
So the question becomes how to you regard them? And Stakeholder Theory in its important facets, the one that matter have a normative aspect.
And that is these are the ways, these ways, are the ways that you should treat stakeholders as opposed to the way that you do treat them or they just happen to be in your environment and you can't ignore them. So this is what distinguishes stakeholder theory from stockholder theory.
Now Stockholder Theory, advocates of Stockholder Theory have to take account [of stakeholders] as well, the difference is that they are doing so for the purpose of enriching stockholders as apposed to doing it for the purpose of enchancing the well-being of themselves, but also their stakeholders, also these groups [with] which they interact in the wealth creation process - as we call it in the trade.