Freeman, "managing for stakeholders"
"To createvaluefor stakeholders, executivesmust understandthat businessis fully situatedin the
realm of humanity. Businessarehumaninstitutionspopulatedby real live complex humanbeings.
Stakeholdershavenamesandfacesandchildren.They arenot mereplaceholdersfor social roles.
As such, mattersof ethicsareroutinewhenonetakesamanaging for stakeholdersapproach." (P.6
Social roleargument-social rolein relateto theprinciple.
Meansthemanagersis not merely anagent.
Thisapproachsolvessomeof theproblemsof thedominant model
Thedominant model (stockholder model):
Managerial capitalism with shareholdersatthecenter, springsfrom aseparation betweenmanage
Increasing shareholder valueis thusparamount. Executiveincentiveplansaretiedto acompany's
In other words, it is anormativemodel with too many problemsandexceptions
Not Consistent with basic ehics
"X is abusinessdecison"
"X is anethical decision"
-A businessdecision cannot beseperatefrom ethical decision. Thereis nosuchthing asapurebu
-To seperatebusinessandethical, any act which you might consider abusinssdecision canalsob
ecalled asanethical decision.
-Theopenquestion argument supportstheseparation fallacy. Theopenquestion argument
1if thedecision is madefor whom is valuecreatedor destryed?
2Whois harmedandor benefitedby this decision?
3Whoserightsareenabledandwhosevaluesarerealizedby this decision?
4What kind of personwill I becomeif we makethedecison?
-Someonegot impactednegatively. Theother is thepoint, is all ethical caresabout. Thebusiness
decision is all about it.
-what kind of personami? Cani live with suchdecision?Cani let my kidsbeimpactedby my de
cision?Cani sleepat night?That is what i standfor. I want to set anexamplefor theworld.
-Whenyou ask thesefour quesions,anybusinessdecisionsyou madewill involvethe"Others", a
ndtherefore, becomseaethical decision.
-Thisis something that motivatesFreeman'spaper.
-Pg76suggesting all contractersareall equal.-stakeholder model
-thewholeidea: weactually have"nexusof contracts"- persueequality
-Freemandoesnot buy thepriviligeof shareholder'sidea.
Eachof stakeholder groupsshould betreatedasend, not to betreat asmeansto servicesomeend.
To treat all eachstakeholder groupasend, best way to achievethat endis to let themall participat
ein thefirm'swell being.
-thequestion: "To whosebenefit andat whoseexpenseshould thefirm bemanaged?"
At thetimehewrotetheessay, both legally andeconomiclly, this is thecase.That changesin thel
awin somesensereflectsthegeneral wishes/wills of thepeople, representation is important. If it i
sthewill of thepeople, firmsshould actsmoreonthesocial role to benefit people. Law makers, r
eformerskeepholding corporationsinto account, whendoing so. Legal argument