Stakeholders Theory - OS

Notes

•Environment and Stakeholder Relations Organizations operate within external environments influenced by suppliers, government, clients, competitors, unions, distributors, partners, financial institutions, and socio-economic, political, cultural, natural, and technological factors. The domain refers to the part of the environment with which organizations interact most directly, shaping and being shaped by these forces. Institutional forces and theories also influence stakeholder relations, highlighting the importance of understanding external influences. •Stakeholders’ Theory and Ethical Considerations Organizations have moral obligations to all affected parties, not just shareholders. Prioritizing stakeholder interests can promote long-term value and sustainability but complicates management due to diverse demands. Milton Friedman’s traditional view advocates profit maximization within legal limits, while Edward Freeman promotes a broader stakeholder approach emphasizing ethical responsibilities and social impacts. •Evolving Perspectives on Business and Society Classical economic theory views nature and society as subordinate to business, relegating externalities to public ...