The stakeholder approach undoubtedly has value to business today. I would argue that our collective experience of stakeholder actions in the last 30 – 40 years, our knowledge of managing change and delivering projects and our understanding of fairness has built a collective view that considering stakeholders 'just makes sense'. stakeholdermap.comBucholtz and Carroll describe the three values of the stakeholder model that enable us to clearly articulate why a stakeholder approach is essential to business and society. The three values of the stakeholder model are:
1. Descriptive valueThe stakeholder model is descriptive - it provides a language and concepts to describe corporations, the way they work and their impacts on the wider environment. As Donaldson and Preston explain:
It [stakeholder theory] presents a model describing what the corporation is. It describes the corporation as a constellation of co-operative and competitive interests possessing intrinsic value. (Donaldson and Preston, pg.66).Stakeholder Theory is useful in helping to understand, and manage organizations, which is why the language of stakeholder theory is used widely in business, not for profit, government etc. (Carroll pg. 70).
2. Instrumental valueThe stakeholder model is instrumental, in that managing stakeholders should result in the achievement of business goals: increased profitability, growth, sustainability. The stakeholder model also allows for the testing of the connections between managing stakeholders and reaching business targets.
3. Normative valueThe third aspect of the stakeholder model is the presumption that stakeholders have inherent value. As Donaldson and Preston explain stakeholder theory accepts that stakeholders have legitimate stakes in corporate activity based on their interest in the corporation and that stakeholders have intrinsic value (Donaldson and Preston, pg. 67).
Both Donaldson, Preston, Carroll and Bucholtz agree that stakeholder theory is in a broad sense managerial because it is descriptive, it enables predictions to be made, and it makes recommendations that together constitute stakeholder management.
It is important to note that while stakeholder management requires an acceptance that a management should consider stakeholders rather than just shareholders, it doesn't require an undiscerning acceptance of all stakeholder interests and allows for the identification and analysis of importance and legitimacy of a stakeholder's 'stake' in the organization (Donaldson and Preston, p67.).
Stakeholder value - references
Carroll, A. and Buchholtz, A. 2014. Business and Society: Ethics, Sustainability, and Stakeholder Management 9th Revised edition edition. South-Western College Publishing
Donaldson, T. and Preston, L., 1995. The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications. The Academy of Management Review, Vol. 20, No. 1. (Jan., 1995), pp. 65-69.