Stakeholder Theory

Overview

Stakeholder theory (Freeman, 1984) argues that firms must manage relationships with all groups who can affect or are affected by the organization — not just shareholders. Mitchell, Agle, and Wood (1997) introduced the salience model to solve the practical problem: which stakeholders deserve managerial attention?

When to Use

• Mapping stakeholders for strategic decisions, projects, or crises
• Prioritizing stakeholder demands when they conflict
• Designing stakeholder engagement strategies
• Evaluating CSR or ESG initiatives through a stakeholder lens

Assumptions