Stakeholder Essay Example | Topics and Well Written Essays - 1250 words

Stakeholder - Essay ExampleWithout a clear consensus on how to define a stakeholder, the essential question that virtually definitions attempt to answer is, What is a stake? The two definitions above certainly represent a contrast in broad versus shockable viewpoints of stakeholders. With Clarksons (1995) narrow perspective, a distinction can be made between stakeholders that voluntarily or involuntarily domiciliate some form of risk. Voluntary stakeholders are those that bear risk based on an investment of either capital, human, or financial value in a firm. Involuntary stakeholders are at risk collect to the activities of the firm. The common element between both types of stakeholders is risk, and without risk there is no stake (Mitchell et al., 1997).In the broader definition offered by Freeman (1984), the list of possible stakeholders is so expansive that it could include almost anyone or any entity. Diverse groups such as suppliers, community, industry, local government, nei ghbors, lobby groups, labor unions, and the natural environment have been include as stakeholders under this broad definition. The broadness of this definition (i.e. can effect or is affected by) allows the stake to be either unidirectional or bidirectional, and there is no requirement for reciprocal action as in a contract or with a relationship (Mitchell et al., 1997).From the critical perspective, Freemans definition (1984) is so broad that it would include everyone or every entity, except those with no power to affect the firm and have no relationship to the firm. The plead that a stakeholder is any group or individual who can effect, or is affected by, the achievement of an organisations objectives (Freeman, 1984 46) is so broad that it is not falsifiable. In contrast, Clarksons definition (1995) uses risk to represent some form of legitimate claim