,Lecture 2- Stakeholder theory.
Ed Freeman:" A stakeholder is any
Stakeholders can include group or individual who can affect, or
employees, customers, is affected by the achievement of a
suppliers, stockholders, corporations purpose.
banks, governments, etc.
There are 2 different views on stakeholder theory: Milton Friedman
vs Ed Freeman.
t
Views Milton Friedman Ed Freeman
Social Only to increase profits Recognizes many responsibilities
responsibility within legal limits. to various stakeholders.
Stakeholder Considers it dangerous, Supports stakeholder interests
theory undermines democracy. to guide management strategy.
Wealth Believes it's the government's Thinks businesses should
distribution role, not the businesses’ consider stakeholder's interests.
Stakeholder Views it as a form of Sees it as a way to address
theory socialism clashes of interest.
-
Shareholder Believes that shareholder Believes that stakeholder
capitalism vs. capitalism supports theory promotes better
Stakeholder democracy and freedom. relationships between business
theory. and society.
,• Stakeholder theory is very much about new mental models for
management, academics, and others.
• These mental models show the ways companies and managers
think about themselves, their products and processes, their
responsibility to their stakeholders, and how they are perceived by
outsiders in different contexts.
A traditional stakeholder map first proposed by Freeman places
the corporation in the center of the graphic.
Criticism; This firm-centric view may prevent companies and
their managers from viewing the firm from the perspective of
others.
Criticism on stakeholder theory:
• Theoretical flaws
• Too much emphasis on powerful stakeholders
• Firm-centric models are fake.
• Thinking is not acting.
• Refusal to really think about ethical implications to
others.
• The stakeholder is too rational bureaucratic, responsibility
is not
, Lecture 3- Moral decision-making
— Consequentialism is a way of moral decision-making. It means that
people will make the decision that has the most beneficial
consequences for them. It is also known as rational choice theory.
— One type of consequentialist thinking is utilitarianism (Jeremy
Bentham, 1748-1832): decisions are considered good if they are
useful. So, when the outcome of an action is good, then the action
itself is good.
— According to Bentham, conflicts with a society were all about
morality. Therefore, it we act more rational, there would be no
conflicts. Thus, rationalism and morality should be intertwined.
• There are 2 things that lead our decisions: pain and pleasure.
Generally, we think that actions are good when they produce
pleasure and actions are bad when they produce pain.
• It is not about individual pain and pleasure, but about as many
people as possible. Thus, we should look at what delivers the
most pleasure to the biggest group of people. Utility is then
anything that increases pleasure for as many people as possible.
— Hedonistic calculus is used to represent the qualities of a certain
action in terms of numbers. So you give something a score using
numbers to evaluate how happy you are with something.
Ed Freeman:" A stakeholder is any
Stakeholders can include group or individual who can affect, or
employees, customers, is affected by the achievement of a
suppliers, stockholders, corporations purpose.
banks, governments, etc.
There are 2 different views on stakeholder theory: Milton Friedman
vs Ed Freeman.
t
Views Milton Friedman Ed Freeman
Social Only to increase profits Recognizes many responsibilities
responsibility within legal limits. to various stakeholders.
Stakeholder Considers it dangerous, Supports stakeholder interests
theory undermines democracy. to guide management strategy.
Wealth Believes it's the government's Thinks businesses should
distribution role, not the businesses’ consider stakeholder's interests.
Stakeholder Views it as a form of Sees it as a way to address
theory socialism clashes of interest.
-
Shareholder Believes that shareholder Believes that stakeholder
capitalism vs. capitalism supports theory promotes better
Stakeholder democracy and freedom. relationships between business
theory. and society.
,• Stakeholder theory is very much about new mental models for
management, academics, and others.
• These mental models show the ways companies and managers
think about themselves, their products and processes, their
responsibility to their stakeholders, and how they are perceived by
outsiders in different contexts.
A traditional stakeholder map first proposed by Freeman places
the corporation in the center of the graphic.
Criticism; This firm-centric view may prevent companies and
their managers from viewing the firm from the perspective of
others.
Criticism on stakeholder theory:
• Theoretical flaws
• Too much emphasis on powerful stakeholders
• Firm-centric models are fake.
• Thinking is not acting.
• Refusal to really think about ethical implications to
others.
• The stakeholder is too rational bureaucratic, responsibility
is not
, Lecture 3- Moral decision-making
— Consequentialism is a way of moral decision-making. It means that
people will make the decision that has the most beneficial
consequences for them. It is also known as rational choice theory.
— One type of consequentialist thinking is utilitarianism (Jeremy
Bentham, 1748-1832): decisions are considered good if they are
useful. So, when the outcome of an action is good, then the action
itself is good.
— According to Bentham, conflicts with a society were all about
morality. Therefore, it we act more rational, there would be no
conflicts. Thus, rationalism and morality should be intertwined.
• There are 2 things that lead our decisions: pain and pleasure.
Generally, we think that actions are good when they produce
pleasure and actions are bad when they produce pain.
• It is not about individual pain and pleasure, but about as many
people as possible. Thus, we should look at what delivers the
most pleasure to the biggest group of people. Utility is then
anything that increases pleasure for as many people as possible.
— Hedonistic calculus is used to represent the qualities of a certain
action in terms of numbers. So you give something a score using
numbers to evaluate how happy you are with something.
