The Moral Basis of Stakeholder Theory

Abstract

Stakeholder theory is an important and commonly used framework for business ethics. Several of the most popular business ethics and business and society texts such as Archie Carroll's Business and Society: Ethics and Stakeholder Management (1993) and Joseph Weiss's Business Ethics: A Managerial, Stakeholder Approach (1994) rely on the concept. In the past two years, over two hundred articles on stakeholder theory have appeared in philosophical and business journals.1 In this paper I will examine the claim that businesses should consider the interests of stake holders, and question whether there is a moral basis for that claim. I will point out three approaches to stakeholder theory: prudence, agency, and deontological views. Of these, deontology has offered the strongest arguments for a normative stakeholder approach. However, on examination it turns out that deontology in this context relies on an embedded notion of corporate personhood. When this is made explicit, it both underwrites duties to some, but not all, stakeholders, and provides a way to distinguish between competing stakeholder claims.