A Stakeholder Approach to Strategic Management Dissertation

Darden Graduate student School of Business Supervision

University of Virginia

Operating Paper No . 01-02

A Stakeholder Method to Strategic Administration

R. Edward Freeman

Ruben McVea

This kind of paper can be downloaded without charge in the

Social Research Research Network Electronic Newspaper Collection at: http://papers.ssrn.com/paper.taf?abstract_id=263511

A Stakeholder Way of Strategic Supervision

R. Edward cullen Freeman


John McVea

The Darden School

College or university of Virginia

Forthcoming in M. Hitt, E. Freeman, and T. Harrison (eds. )

Guide of Ideal Management, Oxford: Blackwell



The purpose of this section is to outline the development of the thought of " stakeholder management" as it has come to be used in ideal management. We begin by having a brief good the concept. We all then claim that traditionally the stakeholder method to strategic supervision has a lot of related attributes that serve as distinguishing features. We review recent work with stakeholder theory and suggest how stakeholder management offers affected the practice of management. We end by suggesting further research queries.



A stakeholder approach to strategy emerged in the mid-1980's. One particular focal point from this movement was the publication of R. Edward cullen Freeman's Ideal Management- A Stakeholder Procedure in 1984. Building on the process job of Ian Mitroff and Richard Mason, and Adam Emshoff [ Pertaining to statements of such views see Mason and Mitroff, (1982) and Emshoff (1978)]. The impetus behind stakeholder administration was to attempt to build a framework that was responsive to of great importance to managers who had been being buffeted by unprecedented levels of environmental turbulence and alter. Traditional technique frameworks had been neither helping managers develop new ideal directions neither were that they helping these people understand how to create new opportunities in the midst of so much change. Since Freeman noticed "[O]ur current theories will be inconsistent with the quantity and kinds of transform that are happening in the business environment of the 1980'sВ…A new conceptual framework is required. "[Freeman, 1984, pg. 5] A stakeholder approach was a response to this challenge. A clear play on the phrase " stockholder", the approach sought to broaden the idea of strategic supervision beyond their traditional financial roots, by simply defining stakeholders as " any group or individual who is troubled by or can affect the achievement of an organization's objectives". The goal of stakeholder administration was to develop methods to manage the variety groups and relationships that resulted in a strategic fashion. As the stakeholder construction had origins in a number of educational fields, its heart place in the clinical studies of management experts that were performed over ten years through the Busch Center, the Wharton Applied Research Centre, and the Bureaucratic and Behavioral Science Center, all in the Wharton Institution, University of Pennsylvania with a host of researchers.

While the 1980's supplied an environment that demonstrated the power of a stakeholder approach, the theory was not totally new. The term stakeholder grew out of your pioneering act on Stanford Exploration Institute (now SRI International) in the 1960's. SRI's operate, in turn, was heavily affected by principles that were developed in the planning department of Lockheed and these ideas were even more developed through the work of Igor Ansoff and Robert Stewart. From the start the stakeholder approach grew out of management practice. 1

you Recently, Mr. Giles Slinger has revisited the early history of the idea of stakeholders. Through more extensive interviews, and the study of a number of famous documents, Slinger rewrites the history as told in Freeman (1984). The essential SRI argued that managers needed to understand the concerns of shareholders, personnel, customers, suppliers, lenders and society, in...

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