Stakeholder Theory

Business Dictionary defines Stakeholder Theory as "a conceptual framework of business ethics and organizational management which addresses moral and ethical values in the management of a business or other organization."

In 1984, R. Edward Freeman originally detailed the Stakeholder Theory of organizational management and business ethics that addresses morals and values in managing an organization. His award-winning book 'Strategic Management: A Stakeholder Approach', identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups.

The theory has become a key consideration in the study of business ethics and has served as a platform for further study and development in the research and published work of many scholars. Since the 1980s, there has been a substantial rise in the theory’s prominence, with scholars around the world continuing to question the sustainability of focusing on shareholders’ wealth as the most fundamental objective of business.