Stakeholder Capitalism

13 Pages Posted: 28 May 2009 Last revised: 4 Nov 2014

R. Edward Freeman

University of Virginia - Darden School of Business

Kirsten E. Martin

George Washington University School of Business

Bidhan L. Parmar

University of Virginia - Darden School of Business

Date Written: May 27, 2009

Abstract

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept.

Keywords: stakeholder theory, free market, pragmatism, ethics, strategy, management theory, capitalism, stakeholder, ethics, economics, libertarian

Suggested Citation

Freeman, R. Edward and Martin, Kirsten E. and Parmar, Bidhan L., Stakeholder Capitalism (May 27, 2009). Journal of Business Ethics, Vol. 74, No. 4, pp. 303-314, 2007. Available at SSRN: https://ssrn.com/abstract=1410852

R. Edward Freeman

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-924-0935 (Phone)
804-924-6378 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/freeman.htm

Kirsten E. M. Martin (Contact Author)

George Washington University School of Business ( email )

Washington, DC 20052
United States

Bidhan L. Parmar

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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