The Stakeholder Theory: The State of the Art

Stakeholder Theory suggests that a company's success depends on balancing the interests of all its stakeholders—anyone affected by its actions, such as employees, customers, communities, and shareholders. Instead of focusing solely on maximizing profits for shareholders, this approach emphasizes the importance of creating value for all parties involved. It encourages businesses to act responsibly and ethically, recognizing that long-term sustainability depends on maintaining positive relationships and trust with these diverse groups. Essentially, it advocates for a holistic view of corporate purpose, aligning corporate goals with societal well-being.