Freeman's Stakeholder Theory: A Summary and Explanation

Freeman's (1984) 'Stakeholder Theory of the Modern Corporation' proposes that businesses should prioritize the interests of all stakeholders, not just shareholders, when making decisions. This includes customers, employees, suppliers, the environment, and the community. Freeman argues that businesses have a responsibility to create value for all stakeholders and not just focus on maximizing profits for shareholders. He believes that adopting a stakeholder perspective can lead to long-term success for businesses and a healthier society overall.

Freeman's viewpoint is that businesses should prioritize the needs of all stakeholders rather than just the interests of shareholders. This includes balancing financial goals with ethical considerations and social responsibility. By doing so, businesses can create value for all stakeholders and contribute to a more sustainable future.