ABSTRACT
This chapter addresses the question of whether the evidently successful spread of stakeholder reasoning—among academic, managerial and political circles—masks an impending intellectual crisis in stakeholder theorising. It also addresses the follow-on question of what, if there is indeed such a crisis, can be done about the situation from a stakeholder viewpoint, and what are the implications for managerial practice. The chapter provides Michael Jensen as a starting point for stakeholder thinking; Jensen mounts a strong financial-economics counterattack on stakeholder reasoning and its practice by managers. It explores stakeholder theory from a financial-economics starting point rather than as an alternative. The external development is a strong counterattack by respectable and intelligent advocates of the financial-economics alternative to stakeholder theory. The financial-economic theory of the firm has substantially evolved beyond the legalistic stockholder doctrine and short-run profit maximisation model at which stakeholder theorising in its origin was directed.
