Thursday, January 26, 2012
Normative Stakeholder Theory
In class while talking about stakeholder theory, we were discussing the example of Appletree City. I believe that James Humber makes a very good point that there are many flaws in a normative stakeholder theory. In the Appletree City example we saw that technically both corporations were acting morally in accordance to their own normative stakeholder theory, but were faced with very tough choices that either way they decided to go could be seen as an immoral move. Another problem I see with normative stakeholder theory is that it would be very difficult for a large corporation to please all stakeholders. Just using customers as an example, customers in California are very different and have very different values than most customers in Ohio would have. In some places even county to county and local community to the next local community would have very different interests and norms.
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That's a really interesting point, Cody. It would be hard to figure out how to balance stakeholder interests. You would have to answer questions like: "Are the interests of the people who buy my product or the interests of the people who fund my company more important right now?" I'm not sure how anyone would figure that out. I think right now most managers answer that question based purely on economic considerations, figuring out how to divide their attention between each party in order to make the most money possible. So in a way I guess I'm saying that I think stockholder theory is really stakeholder theory with profit-maximization as it's normative core.
ReplyDeleteBut I actually think that for the most part a specific group of stakeholders WOULD probably have common interests. For instance, I think that all customers can agree that they want a reasonable price, a good-quality product, etc. I think the interests of a stakeholder group are different than the values of a stakeholder group. Because you're right, to try to cater to all of the different values of stakeholders would be impossible.
yea values probably wasn't the best word. The more I thought about it I was thinking more along the lines of how one town could be democratic and very liberal and one very close could be a mostly republican conservative town. Also I was thinking about maybe in the case of a Walmart a small conservative town out in the country would usually be against a walmart coming into their town, and them type towns usually have a lot of family owned business, where bigger more populated city type areas have walmarts all over the place.
DeleteI was thinking the same thing. How is a corporation going to please the stakeholders? It is like a restaurant. A restaurant tries to make everyone happy but they have to choose what to make so they can make many people happy. So they have to make a choice for what to serve but all customers have different interest in food. Also in varies in many different places. It doesn't deal with what is immoral but it is kind of like the idea of pleasing all the stakeholders.
ReplyDeleteI agree completely. While trying to please all the stakeholders is a good notion, it is not a very realistic one for a corporation.
ReplyDeleteI agree with your statement because you can't please everyone no matter how hard one tries. With stakeholder theory there are so many people involved that it would be impossible to do what everyone wants.
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