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Does the Stakeholder Theory Constitute a New Kind of Theory of Social Responsibility?

Published online by Cambridge University Press:  23 January 2015

Thomas L. Carson
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Abstract

In a recent paper, Kenneth Goodpaster formulates three versions of the stakeholder theory of corporate social responsibility. He rejects the first two versions and endorses the third. I argue that the theory that Goodpaster defends under the name “stakeholder theory” is a version (albeit a somewhat different version) of Milton Friedman’s theory of corporate social responsibility. I also argue that the first two formulations of the stakeholder theory which Goodpaster discusses are at most only slight modifications of other theories. I conclude by formulating a fourth version of the stakeholder theory which I believe does constitute a substantial departure from earlier theories of social responsibility.

Type
Response Articles
Information
Business Ethics Quarterly , Volume 3 , Issue 2 , April 1993 , pp. 171 - 176
Copyright
Copyright © Society for Business Ethics 1993

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References

Notes

1 “Business Ethics and Stakeholder Analysis,” Business Ethics Quarterly; Volume 1, number 1, January 1991, pp. 53–72CrossRefGoogle Scholar.

2 “Business Ethics and Stakeholder Analysis,” p. 60.

3 Alternatively, we might call this “the loyal agent’s principle”—a principle which says that the only moral duties of executives are duties to shareholders. A business which maximizes its profits might be said to be acting egoistically, but executives who act in the best interests of the shareholders are not necessarily acting in their own self-interest.

4 Goodpaster, p. 60.

5 Goodpaster, p. 61.

6 In principle, any human being could be chosen to be the beneficiary of corporate largess. On the view that others are significantly affected by one’s failure to do things, it follows that any human being who is not chosen to be the beneficiary of a corporation’s charity is significantly affected by the corporation’s failure to help her.

7 Goodpaster, p. 63.

8 Goodpaster, p. 69-70.

9 Capitalism and Freedom, (Chicago: University of Chicago Press, 1963), p. 133.

10 “Social Responsibility of Business,” in Friedman’s book, An Economist’s Protest (Thomas Horton, 1972), pp. 178. For a discussion of the very substantial differences between Friedman’s two formulations of his theory of corporate social responsibility, see my paper, “Friedman’s Theory of Corporate Social Responsibility” (unpublished).

11 A very similar view can be found in “The Responsibilities of Corporations and Their Owners,” John, Simon, Charles, Powers, and Jon, Gunneman, in Ethical Theory and Business, second edition, Tom, L. Beauchamp and Norman, E. Bowie, eds., (Prentice Hall, 1983)Google Scholar.

12 Goodpaster’s NSS is a significant contribution to business ethics. My aim is only to show that it is a version of Friedman’s theory.

13 Lester, Thurow, Head to Head, (New York: William Morrow, 1992), p. 137Google Scholar. The passages which Thurow quotes are from Karl Kester, W., Japanese Takeovers: The Global Quest for Corporate Control (Boston: Harvard Business School Press, 1991), pp. 21, 79.Google Scholar

14 I am not trying to defend the RNSS. Indeed, inasmuch as I regard myself as a utilitarian, I would reject the RNSS. I only claim that it is a plausible principle which bears examination.

15 Ross, W.D., The Right and the Good, (Oxford: The Clarendon Press, 1930), p. 19Google Scholar.

16 The Right and the Good, p. 22.

17 The Right and the Good, p. 18.