Stakeholder Theory and Limitation essay

Stakeholder theory is an excuse for managerial opportunism: The core claim is that by providing more groups who management can argue their actions benefit, stakeholder theory makes it far easier to engage in self- dealing and defend it than if shareholder theory were the sole purpose. 2. Stakeholder theory is primarily concerned with distribution of financial outputs: This view depicts stakeholder theory as primarily about who receives the resources of the organization, and poses a stark and inherent conflict teens shareholders and other stakeholders in terms of who gets what. . All stakeholders must be treated equally: Though several versions of what it means to treat stakeholders equally (e.

G. Egalitarianism; egalitarianism) are offered, the core point is that critics have focused on the notion of treating stakeholders equally, particularly around the language of ?balance that has been prominent in discussions of what it means to manage for stakeholders. 4.Stakeholder theory requires changes to current law: Some have argued hat the law needs to be changed, either to overcome the concern that doing anything other than shareholder management is illegal or to make it easier to practice stakeholder theory (I. E.

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Making it more transparent that using stakeholder theory to manage does not violate core principles of business law). 5. Stakeholder theory is socialism and refers to the entire economy: Phillips et al (2003), argue that stakeholder theory’ is first and foremost a theory of organizations, not a theory of political economy.In addition, while there may e some merit in drawing from stakeholder theory to discussions of economies within a political context, doing so makes truly problematic the concerns raised about the breadth of the theory and for what purposes it is being used.

6. Stakeholder theory is a comprehensive moral doctrine: According to Phillips et al. (2003), stakeholder theory’ is not a comprehensive doctrine. Rather, it is a theory of organizations that does not even cover all the moral questions relevant to a business context, let alone the rest of the moral world.

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