Identifying Stakeholders Is Easy; Prioritizing Stakeholder Interests Is Difficult
In brief: Implementing strategic CSR requires the firm to operate in the interests of a broad range of stakeholders. While identifying a firm’s stakeholders is easy, however, stakeholder theory will only be of practical value when it helps managers prioritize among competing stakeholder interests.
As detailed in Principle 2, shareholders neither own the firm, nor do managers and directors have a legal obligation to run the firm with the primary goal of generating shareholder value. Once managers understand they are free of the mythical obligation to act solely in the interests of the firm’s shareholders, they can take a more expansive (and, in terms ...
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