Stakeholder Theory of the MNC

realization of the social ends looked for by the protagonists of the social

responsibility. It is necessary in this subject to return to the essential education of the  

 

Stakeholder Theory of the MNC  

economic theory, to the market as a mechanism of penalties and rewards and in the

role of the instigations on the behavior.  

The theory and the history demonstrate that in its research for the maximum

profit for its shareholders, the company realizes „the common good " in sub-product,

and especially, that the ambition of " do-gooders " to divert it from its appropriate end

that is the profit produces the exactly opposite effect that the one we suppose.  

6. Conclusion

The Stakeholder Theory is a quite new theory in the way it introduces the

concept of stakeholders in the strategic management of a Multinational Company.

The purpose of the MNC is not anymore only to make profit for shareholders but also

to defend an image and values respecting all stakeholders. There is of course a link

between the wealth of Shareholders and the wealth of all Stakeholders because the

MNC need a good reputation to sell its products and so to make profits. But it has still

not been clearly proven by empirical studies.  

The Stakeholder Theory is very popular in our times because people, and so

on stakeholders, are worried about the sustainability of the actual economic system.

With globalization, companies take more and more importance and are in many

cases more powerful than states. In these conditions, their action can have a huge

impact on the society in general, and people ask such companies to have “ethic” and

values. With deregulation, and less power of state in favour of economy, companies

should not only enjoy the rights of this deregulation but also duties. And that is what

stakeholders (and in particular consumers) are asking for. Examples of Shell or Nike

show that an irresponsible way of management, with low ethic or values, lead to a

decreasing wealth of the first stakeholder of an MNC, its owner, shareholders.  

One of the main problems of the stakeholder theory is: stakeholder theories!

One of the major contribution in Stakeholder theory is Freeman book “Strategic

Management: A Stakeholder Approach” (1984) and it is often seen as the fundament

of the Stakeholder theory. Then many Economists or Sociologists have made their

contribution but not always sharing Freeman concept of Stakeholders. As a signs of  

 

Stakeholder Theory of the MNC  

these divergences we have shown that there is more than 75 definitions of

Stakeholders, witch is of course the key point of the theory. This is mainly due to the

fact that Stakeholder Theory is not only an economic theory, having a huge part of

philosophic or sociologic concepts.  

But in spite of these discussions it seems possible to identify some

propositions on witch every author agree: The firm has stakeholders witch have

requests, every stakeholders do not have the same influence, MNC prosperity

depends of the ability of the companies to manage strategic stakeholders and the

principal function of managing stakeholder is to take into account and to arbitrate

stakeholders requests even when there are contradictory.  

In practice, contributions of these different theories at the governance level

establish a new base to redefine the stakes of the company and its model of

governance, analyzing them with regard to the expectations and to the interests of

stakeholders. It is what led to us to analyze in our third part the concept of CSR.  

In the sights of what we explained, it seems that the application of the CSR

can only come true, in general in the social and environmental sides, under reserve

that this application does not prevent from financial profits (as the CSR slogan says: "

doing well by doing good "). However we can notice the attitude of companies trying

to take into account, in an increasing way, this “new” approach of governance, and

this, facing to more and more strong pressures coming from the different

stakeholders. Furthermore, companies are more and more urged to position

themselves in front of the emergence of the “sustainable development” concept, and

making it, the CSR seems to be an effective instrument for the integration of this

concept by companies in their strategic orientation.  

 

Stakeholder Theory of the MNC  

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