This paper derives from a conference in Applied Ethics, Moral Philosophy in the Public Domain, held at the University of British Columbia, in June 1990. It will also appear in an anthology currently in preparation at the UBC Centre of Applied Ethics.

¹ Strictly speaking the historical meaning of “stakeholder” in this context is someone who literally holds the stakes during play.

² See Goodpaster and Piper, Managerial Decision Making and Ethical Values, Harvard Business School Publishing Division, 1989.

³ See Goodpaster, PASCAL: A Framework For Conscientious Decision Making (1989).

⁴ Actually, there are subtle ways in which even the stakeholder identification or inventory process might have some ethical content. The very process of identifying affected parties involves the use of the imagination in a way that can lead to a natural empathetic or caring response to those parties in the synthesis, choice and action phases of decision-making. This is a contingent connection, however, not a necessary one.

⁵ Note that including powerless stakeholders in the analysis phase may indicate whether the decision-maker cares about “affecting” them or “being affected by” them. Also, the inclusion of what might be called secondary stakeholders as advocates for primary stakeholders (e.g., local governments on behalf of certain citizen groups) may signal the values that will come into play in any synthesis.

⁶ It should be mentioned that some authors, most notably Andrews, Kenneth R. in The Concept of Corporate Strategy (Irwin, Third Edition, 1987)Google Scholar employ a broader and more social definition of “strategic” decision-making than the one implied here.

⁷ Freeman writes: “Theoretically, ‘stakeholder’ must be able to capture a broad range of groups and individuals, even though when we put the concept to practical tests we must be willing to ignore certain groups who will have little or no impact on the corporation at this point in time.” (52–3)

⁸ Ladd observed in a now-famous essay entitled “Morality and the Ideal of Rationality in Formal Organizations” (The Monist, 54, 1970) that organizational “rationality” was defined solely in terms of economic objectives: “The interests and needs of the individuals concerned, as individuals, must be considered only insofar as they establish limiting operating conditions. Organizational rationality dictates that these interests and needs must not be considered in their own right or on their own merits. If we think of an organization as a machine, it is easy to see why we cannot reasonably expect it to have any moral obligations to people or for them to have any to it.” (507)

⁹ “Public Obligations of Private Corporations,” U. of Pennsylvania Law Review 114 (1965). Ruder recently (1989) reaffirmed the views in his 1965 article.

¹⁰ Business Products Corporation—Part 1,” HBS Case Services 9–377-077.

¹¹ “The Business Judgement Rule” gives broad latitude to officers and directors of corporations, but calls for reasoning on the basis of the long-term economic interest of the company. And corporate case law ordinarily allows exceptions to profit-maximization criteria only when there are actual or potential legal barriers, and limits charitable and humanitarian gifts by the logic of long term self-interest. The underlying rationale is accountability to investors. Recent work by the American Law Institute, however, suggests a rethinking of these matters. See Exhibit 2.

¹² (Christopher Elias, “Turning Up the Heat on the Top,” Insight, July 23, 1990).

¹³ We might consider the NDP in broader terms that would include the relationship between “client” and “professional” in other contexts, such as law, medicine, education, government, and religion, where normally the community's expectations are embodied in ethical standards.

¹⁴ Nagel, T., The View from Nowhere, Oxford U. Press (1986), p. 163.Google Scholar