Each stakeholder group, it is further reasoned, has a right to be treated
as an end in itself, and not as means to some other end, {{and therefore
must participate in determining the future direction of the firm in
which [it has] a stake|| (1995:73). Similarly, this theory submits it is
the responsibility of managers, and the management function, to
{{select activities|| to obtain optimal benefits for all identified stakeholder
groups, without giving priority to one stakeholder|s interests
over another. Consideration should be given to each stakeholder
group, regardless of the relative power or interest held by each. Likewise,
management must proactively seek out inputs from all groups,
as some will have stronger {{voices|| than others and this should
not determine the priority of management|s attention. Under this
philosophy, the entire purpose of the firm becomes the co-ordination
of stakeholder interests. Since the theory presumes that managers
act as if all interests have intrinsic value, the recognition of this value
and the resulting obligations to the stakeholder grants the theory its
normative core. This does not preclude the descriptive or instrumental
power of the theory. Indeed, researchers argue that its overall managerial
worth stems from the fact that the normative, descriptive,
and instrumental aspects of the theory are {{mutually supportive||.
Arguably, however, the theory|s dominant role is its ability to provide
moral and philosophical guidelines for the management of an organization
(Donaldson and Preston 1995).
Each stakeholder group, it is further reasoned, has a right to be treated
as an end in itself, and not as means to some other end, {{and therefore
must participate in determining the future direction of the firm in
which [it has] a stake|| (1995:73). Similarly, this theory submits it is
the responsibility of managers, and the management function, to
{{select activities|| to obtain optimal benefits for all identified stakeholder
groups, without giving priority to one stakeholder|s interests
over another. Consideration should be given to each stakeholder
group, regardless of the relative power or interest held by each. Likewise,
management must proactively seek out inputs from all groups,
as some will have stronger {{voices|| than others and this should
not determine the priority of management|s attention. Under this
philosophy, the entire purpose of the firm becomes the co-ordination
of stakeholder interests. Since the theory presumes that managers
act as if all interests have intrinsic value, the recognition of this value
and the resulting obligations to the stakeholder grants the theory its
normative core. This does not preclude the descriptive or instrumental
power of the theory. Indeed, researchers argue that its overall managerial
worth stems from the fact that the normative, descriptive,
and instrumental aspects of the theory are {{mutually supportive||.
Arguably, however, the theory|s dominant role is its ability to provide
moral and philosophical guidelines for the management of an organization
(Donaldson and Preston 1995).
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