ABSTRACT
The wave of corporate mergers, takeover attempts, and buyouts during the 1980s focused new attention on an old issue: for what purposes, and for whose benefit, is the modern corporation operated? Or, as Dodd put it in the title of his 1932 classic: "For Whom Are Corporate Managers Trustees?" By the end of the decade, thirty-nine states had passed laws impeding management-opposed takeovers, and twelve had amended their statutes to permit (and in three cases require) board consideration of the interests of multiple stakeholders—employees, customers, communities, etc.—when important corporate decisions are being made. A 1988 Business Roundtable study of 100 major companies found "widespread recognition that corporate obligations extend to a variety of constituencies or stakeholders." Leading corporate-image advertisers (e.g., Mobil, NCR, IBM) have featured the stakeholder concept in their ads; and the notion that successful management requires effective performance with respect to multiple objectives is now a staple of the academic literature (see Andrews 1987, chap. 5; Steiner, Miner, and Gray 1986; Wheelen and Hunger 1986; Hatten and Hatten 1987, chap. 9; Macrnillan and Jones 1985, chap. 4; Frederick, Davis, and Post 1988, chap. 4; Buchholz 1989, chap. 10 and pp. 457-60; Steiner and Steiner 1988, pp. 14-16, 251-52; stakeholder management is the main subject of Freeman 1984; O'Toole 1985; and Alkhafaji 1989). Little is known, however, about the extent to which major U.S. corporations are in fact managed to achieve multiple stakeholder objectives, or about the ways in which performance with respect to various stakeholder interests is interrelated. This paper discusses some critical aspects of the stakeholder concept that appear to be neglected in the literature, and reports the results of an empirical study designed to provide some evidence about the extent and implications of stakeholder management in a sample of large U.S. corporations.
