Blog 2

Freeman’s stakeholder theory of modern cooperation involves groups and individuals who benefit from or are harmed by, and whose rights are violated or respected by, corporate actions. Freeman classifies two types of stakeholders, narrow and wide definition. The narrow stakeholders are an exclusive group who is more precise. The wide stakeholders are more vague. Just as stockholders have the right to demand certain actions under management, stakeholders also has a right to make claims. Stakeholders in the modern corporation include owners, employees, suppliers, management, customers, and loyal community. The owners have a financial stake in the corporation in the form of stocks, bonds, and they expect some kind of financial pay in return. Employees have jobs and usually their livelihood at stake; they often have specialized skills for which they expect, security, wages, benefits, and meaningful work. In return for being loyal, the corporation is expected to provide for them even through the tough times. Employees are expected to follow and obey all rules that are presented to them as a part of their job. Suppliers are vital to the success of the corporation, for raw materials will determine the final product's quality and to the success and survival of the supplier. When the corporation treats the supplier as a valued member of the network, then the supplier will respond when the corporation is in troubled times. Customers exchange resources for the products of the corporation and in return receive the benefits from the products income. Customers provide the lifeblood of the corporation as they buy the goods from the corporation. Customers indirectly pay for the development of new products and services because their money goes new production. The local community grants the corporation the right to build facilities, and benefits from the tax base, economic and social contributions of the corporation. Stakeholders give the corporate responsibility for the cooperation of the company to make sure the company runs effectively and to its best ability. Social responsibility would depend on the normative core. Some examples would be freedom and rights within the corporation. A corporation cannot be socially responsible for their workers if they don’t possess freedom and their own rights. If they did not posses theses values then they would not want to work for the employees causing the corporation to hurt. Without employees the corporation would not run and produce goods to benefit the consumers. Freeman writes that "Stakeholer theory is thus a genre of stories about how we could live."