Normative stakeholder theory

In opposition to the belief that a business corporation ought to be governed solely in the financial interests of its shareholders and that questions of ethics are subordinate to the maximisation of shareholder value, stakeholder theorists place ethical values at the centre of management research and argue that managers should serve the interests of all primary stakeholders (employees, customers, suppliers, communities and shareholders). This entry surveys 30 years of theoretical contributions to this normative conception of corporate purpose. Various traditions of moral and political philosophy have informed stakeholder theory, including Kantian, Rawlsian, Aristotelian, Habermasian, and feminist approaches, and this entry seeks to convey this philosophical breadth. It also reviews the criticism that stakeholder theory is incompatible with the economic rationale for competitive markets and explores a recent utilitarian rejoinder.