The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of “business” together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business.
R. Edward Freeman is Elis Signe Olsson Professor of Business Administration and Director of the Olsson Center for Applied Ethics at The Darden School of Business Administration. Mr. Freeman is also a professor of religious studies at the University of Virginia. He has a Ph.D. in philosophy from Washington University and a B.A. from Duke University. Freeman’s areas of research are business ethics, business policy and strategy, and organizational behavior. His books include Ethics and Agency Theory (with N. Bowie); Business Ethics: The State of the Art; The Logic of Strategy (with D. Gilbert, Jr., E. Hartman, and J. Mauriel); Management, 6th Edition (with D. Gilbert, Jr.); and Corporate Strategy and the Search for Ethics (with D. Gilbert, Jr.). Freman has served as a consultant to AT&T, Blue Cross, and Gulf Oil.
1 This paper has had a long gestation period. I want to acknowledge the comments and conversations of a number of people. The main ideas in this paper have been refined over a number of years via seminars at Georgetown University, the Society for Business Ethics, Dartmouth College, Loyola University, the Wharton School and others. I am especially indebted to Max Clarkson, Michael Deck and the Canada Council for Social Sciences for sponsoring a workshop on Stakeholder Theory in May of 1993, and to Peter Pruzan, Ole Thuyson, and Werner Peterson and the Danish Council for Social Science for sponsoring a conference on ethics and stakeholders in Copenhagen in the Fall of 1993. Participants at both of these conferences produced many more refinements and suggestions than I can individually attribute. Also, I have benefited from conversations with Kendall D’Andrade, John Boatright, Steve Brenner, Archie Carroll, Phil Cochran, Robbin Derry, Tom Donaldson, Ken Goodpaster, Ron Green, and Terry Halbert, as well as my colleagues at The Darden School, Rosalyn Berne, Andrea Larson, Jeanne Liedtka, Tara Radin, and Patricia Werhane. It is now difficult to separate out how much of these ideas I owe to Daniel R. Gilbert, Jr.