The modern corporation is an institution of enormous economic power and
social impact. Corporations have grown in size and numbers all over the
world because of their ability to mobilize productive resources and
create new wealth. The evolution of the corporation has given rise to
new opportunities and challenges that require a redefinition of the
corporation and its objectives.
The legitimacy of the corporation as an institution, its "license to
operate" within society, depends not only on its success in wealth
creation but also on its ability to meet the expectations of diverse
constituents who contribute to its existence and success. These
constituencies and interests are the corporation's
stakeholders--resource providers, customers, suppliers, alliance
partners, and social and political actors. Consequently, the corporation
must be seen as an institution engaged in mobilizing resources to create
wealth and benefits for all its stakeholders.
This book presents a stakeholder view of the corporation in both
theoretical and practical terms. Its central proposition is that
organizational wealth is created (or destroyed) through a corporation's
interactions with its stakeholders. Effective stakeholder management
develops and utilizes relationships between a corporation and its
stakeholders for mutual benefit, thereby accomplishing the fundamental
purpose of wealth creation.
Following the empirical maxim that "Corporations are what they do,"
the authors examine the stakeholder management practices of three major
corporations: Cummins Engine Company, Motorola, and the Royal
Dutch/Shell Group. These companies are very different, and their current
stakeholder management policies and practices have evolved in very
different ways. However, they share a common commitment to humanistic
values and to continuous learning. Their varied experiences illustrate
some of the opportunities and challenges of stakeholder management, and
confirm the appropriateness of the stakeholder view of the corporation
as a basis for strategy and policy.
