Practical Sustainability Strategies, 2nd Edition

CHAPTER 19The Corporation and its Stakeholders

EXAMINING THE STAKEHOLDER CONCEPT

The relationship between the organization and its stakeholders has evolved over time. During previous years, the only groups that seemed to attract an organization's attention were those related to the production and purchase of their products or services. These groups, also known as the three-legged stool, included the employees, investors, and customers. More specifically, during the pre-corporate period, investors, who supplied their money in order to support the business, were the only individuals to have stake in its operations and successes. These investors/owners, typically the managers of the firm, required assistance from employees to operate the business. All in all, the procedures were less complex, but so were, moreover, the expectations among the various parties involved with the organization.

As years went by, various forces triggered society toward transformation. A principal factor that greatly contributed to the gradual change of business conduct was the recognition by the public, or society, that any organization is not the sole property or interest of the founder or owner. This and many other driving forces have created the need for businesses today to be responsive to individuals and groups they formerly viewed as powerless and indifferent toward their conduct. Thus, the stakeholder concept emerged. Contemporary stakeholder focus includes an augmented number of groups, and it ...