This chapter is divided into four sections. The first will review the development
of the ethical perspective of HRM and, consequently, note the absence
of any substantial debate of stakeholder theory. The second section will introduce
stakeholder theory, by outlining its emergence as an important force in
managerial theory and providing an overview of its fundamental principles.
Stakeholder theory will be identified as being based on pluralist ideology.
Next, the debate about the identification and classification of stakeholders
and nature of the stakeholder relationship will be outlined with particular
reference to employees as ‘claimant’ stakeholders. The nature of the ‘stake’ will
be considered. Criticisms of stakeholder theory, particularly the limitations of
its pluralist foundations, will be identified.