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    Managing For Stakeholders by R. Edward Freeman - Notes

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    pchimanshu27

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    Managing For Stakeholders by R. Edward Freeman - Notes

    Uploaded by

    pchimanshu27
    6 views2 pages

    Original Title

    1. Managing for Stakeholders by R. Edward Freeman_Notes

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    6 views2 pages

    Managing For Stakeholders by R. Edward Freeman - Notes

    Uploaded by

    pchimanshu27

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Here are more detailed notes on the key topics from the document on "Managing for

    Stakeholders" by R. Edward Freeman:

    ### I. Introduction

    - The essay introduces a shift in perspective from traditional, shareholder-centric views of


    business to a stakeholder-oriented approach. Freeman argues that businesses should create
    value not just for shareholders but for all stakeholders, including customers, employees,
    suppliers, communities, and financiers. This approach acknowledges the complex
    interdependencies in modern business and challenges the idea that businesses exist solely to
    maximize shareholder profit.

    ### II. The Dominant Story: Managerial Capitalism with Shareholders at the Center

    - This section delves into the historical context of managerial capitalism, where the focus was
    predominantly on shareholder value. It traces the evolution of businesses from simple, owner-
    operated entities to complex organizations requiring broader capital and diverse labor. The
    narrative explores how this evolution led to the separation of ownership and management,
    highlighting the rise of managerialism and bureaucracy, and critiquing the sole emphasis on
    shareholder value as limiting and misaligned with current legal and ethical standards.

    ### III. Managing for Stakeholders

    - Freeman outlines the basic premise of managing for stakeholders, emphasizing a business
    model where value creation encompasses a wider array of stakeholders beyond just
    shareholders. He introduces the concept through a "wheel and spoke" diagram representing
    different stakeholders around the business, underscoring the interconnectedness and mutual
    dependencies among these groups. This section also explores the concept of stakeholders
    more deeply, discussing their stakes, rights, and the ethical implications of business decisions
    on these groups.

    ### IV. The Responsibility of the Executive in Managing for Stakeholders

    - Here, the focus shifts to the role of executives in navigating the complex web of stakeholder
    relationships. Freeman argues that executives must seek to create as much value as possible
    for stakeholders, working to harmonize their interests without resorting to trade-offs. This
    involves reframing business challenges in ways that are inclusive of all stakeholders' interests
    and ensuring that ethical considerations are central to business strategy.

    ### V. Some Arguments for Managing For Stakeholders

    - Freeman presents several philosophical arguments supporting the stakeholder approach:


    - **The Argument from Consequences:** Proposes that a stakeholder-centric approach may
    lead to better outcomes for all involved, as it recognizes the interconnectedness of stakeholder
    interests.

    - **The Argument from Rights:** Highlights the ethical obligation to respect the rights of all
    stakeholders, not just shareholders.

    - **The Argument from Character:** Suggests that businesses should aspire to create a certain
    type of organizational character, one that is ethical and responsible towards all stakeholders.

    - **The Pragmatist’s Argument:** Appeals to a practical, ethical approach to business that


    seeks to create a better society through responsible, stakeholder-focused practices.

    ### Conclusion

    - The essay concludes with a call to adopt managing for stakeholders as a new narrative for
    business, one that emphasizes social cooperation, collaboration, and the integration of ethical
    considerations into the core of business operations. This approach is presented as not only
    ethically sound but also as a practical strategy for navigating the complexities of modern
    business.

    These detailed notes provide a comprehensive overview of Freeman's arguments for a


    stakeholder-centric approach to business management, emphasizing the ethical, legal, and
    practical considerations that support this perspective.

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