Stakeholder Theory

Since the last two decades, Stakeholder Theory has received increasing attention from practitioners, policymakers, and academics. This increasing popularity has brought several liabilities and ambiguities. As a result, Stakeholder Theory is often confused with corporate social responsibility and presented as an anti-shareholder approach. In this paper, we clarify these ambiguities. We start with a description of Stakeholder Theory and explain its three main insights. Then, we highlight the background, discuss limitations and criticisms, and indicate areas where research is needed. Building on the empirical work, we present the 4C framework that will be useful in understanding and implementing Stakeholder Theory in various contexts and situations.