Stakeholder theory defines stakeholders as groups who can affect or are affected by a company, including shareholders, customers, employees, and suppliers. It proposes that companies should consider the interests of these stakeholders, rather than just shareholders, and manage stakeholder relationships through defining who the stakeholders are and how they should be treated. While stakeholder theory provides guidance for ethical corporate management, it has been criticized for not fully reflecting how corporations actually operate in prioritizing profits over other stakeholders.

1. Stakeholder Theory

2. “ a theory of organizational management and business ethics that addresses morals and values in managing an organization”

3. Who uses it? Corporations! Organizational Communication

4. 1. Define the specific stakeholders 2. Examine how they should be treated as stakeholders 2 Steps of theory:

5. This theory is crucial for the success of organizations!

6. Why? Because the sole responsibility of the organization is to those who own the instruments of production (the stakeholders!)

7. Stakeholder

8. 5 Categories of Stakeholders Shareholders Customers Employees Suppliers Communication

9. Criticism: Provides an unrealistic view of how corporations really work

10. Stakeholder Theory is an ethical perspective… Meaning a business is behaving ethically if profits are generated for the stakeholder

11. Do not confuse with ethical judgments based on the right/justice-based perspective which is based on dignity. Ethics according to stakeholder theory are about profit.