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Stakeholders and Corporate Social Responsibility: An Ownership Perspective

Forthcoming in Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milli-ken, eds., Sustainability, Stakeholder Governance & Corporate Social Responsi-bility, vol. 38 of Advances in Strategic Management.

27 Pages Posted: 20 Feb 2018  

Nicolai J. Foss

Bocconi University

Peter G. Klein

Baylor University, Department of Entrepreneurship; Norwegian School of Economics, Department of Strategy and Management; Mises Institute

Date Written: February 8, 2018

Abstract

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

Foss, Nicolai J. and Klein, Peter G., Stakeholders and Corporate Social Responsibility: An Ownership Perspective (February 8, 2018). Forthcoming in Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milli-ken, eds., Sustainability, Stakeholder Governance & Corporate Social Responsi-bility, vol. 38 of Advances in Strategic Management. . Available at SSRN: https://ssrn.com/abstract=3120731

Nicolai J. Foss

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Peter G. Klein (Contact Author)

Baylor University, Department of Entrepreneurship ( email )

Waco, TX 76798
United States
254-710-4903 (Phone)

Norwegian School of Economics, Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway

Mises Institute ( email )

Auburn, AL
United States

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