The lessons from stakeholder theory for U.S. business leaders

It has been 20 years since Freeman [Freeman, R. E. (1984). Strategic management: A stakeholder approach. Marshfield, MA: Pittman Publishing.] first proposed his stakeholder approach to strategic management, which stated that corporations must consider the needs and demands not only of their shareholders but also those of a wide range of other external constituencies, or “stakeholders.” Examples of stakeholders include customers, employees, suppliers, and communities. Freeman's theory has generated an extensive body of research, including not only the efforts of the management researchers who have tested, revised, and refined the theory, but also the views of corporate executives who have used the stakeholder approach in their strategic planning. This article, based upon a review of that literature, identifies five important lessons from the stakeholder model for today's business leaders. These lessons are particularly timely, given the inappropriate behavior that has occurred in the business world during recent years.