Stakeholders and Corporate Social Responsibility: An Ownership Perspective
Forthcoming in Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milliken, eds., Sustainability, Stakeholder Governance & Corporate Social Responsibility, vol. 38 of Advances in Strategic Management.
27 Pages Posted: 20 Feb 2018 Last revised: 27 Feb 2018
Date Written: February 8, 2018
We argue that the stakeholder and CSR literatures can benefit from more systematic thinking about ownership. We discuss general notions of ownership in economics and law and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with ownership as an economic function that can be exercised with greater or lesser ability, may be complementary to other economic functions, and works better when assigned to homogeneous groups. Some stakeholder groups are likely to lack what we call “ownership competence,” even if they have made relationship-specific investments, in part because of diverse interests. We also discuss CSR from the perspective of ownership and support Friedman’s original position, but with a twist. The point of Fried-man’s paper is not that firms “should” maximize profits, but that managerial pursuit of “socially responsible” activities in a discretionary way imposes costs on owners. We suggest this problem is exacerbated with entrepreneurial managers who can devise new ways to disguise self-interested actions as CSR initiatives.
Keywords: ownership, economics of the firm, stakeholder theory, corporate social responsibility
JEL Classification: D20, D33, G30, M1
Suggested Citation: Suggested Citation