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Stakeholder Model of Corporate Social Responsibility

The stakeholder model of corporate social responsibility implies that managers are responsible for corporate decisions since they influence various stakeholders. On the one hand, every business decision is associated with some costs that fall on certain stakeholders. At the same time, other stakeholders benefit from the decisions. According to the theory, managers should balance costs and benefits for the wide range of people affected by the decisions (DesJardins 64). The ethical dimension answers the question of who benefits and who pays for each business decision.

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Unlike the economic model and the minimum moral model, this model does not give shareholders a privileged position, although as a rule, the shareholders become the primary beneficiaries of business decisions. The stakeholder model of corporate social responsibility argues that everyone has equal rights, and the legitimate rights of stakeholders should limit the actions of corporations. Interestingly, this model views shareholders not as owners but rather as investors. Other factors of a business may include labor, materials, social infrastructure, or the market. Therefore, companies must create value for customers, suppliers, employees, communities, and financiers.

From an ethical perspective, the stakeholder model of corporate social responsibility is based on the utilitarian theory and Kant’s formulation that the primary moral imperative is to treat people as ends, not means (DesJardins 65). One challenge this model faces is the failure to admit the existing legislation that regulates the relations between corporations and stakeholders and protects the latter’s rights. Another challenge is that theory is too vague to initiate practical recommendations. In particular, managers may have problems defining all stakeholders’ interests if the model is interpreted too broadly.

Work Cited

DesJardins, Joseph R. An Introduction to Business Ethics. 6th ed., New York: McGraw-Hill Higher Education, 2020.

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StudyCorgi. (2022, July 16). Stakeholder Model of Corporate Social Responsibility. Retrieved from https://studycorgi.com/stakeholder-model-of-corporate-social-responsibility/

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StudyCorgi. (2022, July 16). Stakeholder Model of Corporate Social Responsibility. https://studycorgi.com/stakeholder-model-of-corporate-social-responsibility/

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StudyCorgi. "Stakeholder Model of Corporate Social Responsibility." July 16, 2022. https://studycorgi.com/stakeholder-model-of-corporate-social-responsibility/.

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StudyCorgi. 2022. "Stakeholder Model of Corporate Social Responsibility." July 16, 2022. https://studycorgi.com/stakeholder-model-of-corporate-social-responsibility/.

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StudyCorgi. (2022) 'Stakeholder Model of Corporate Social Responsibility'. 16 July.

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