Critically assess the arguments for and against adopting a stakeholder Essay

Critically assess the arguments for and against adopting a stakeholder perspective - Essay Example While the proponents of the shareholder perspective have their views so do the proponents of stakeholder perspective. In light of these two approaches, this paper will critically analyze the stakeholder perspective. First, the shareholder approach focused primarily on the owners or individuals holding the shares in the company with little regard of the rest. That is to say, all decisions were taken with the concerns of the owners first then others’ later. Conversely, the stakeholder perspective advocates for recognition of other organs in the business whose influence is also vital. These include the customers, employees, suppliers, governmental bodies and now the owners. According to the contents in Freeman’s book, the traditional shareholder was not only unhelpful to the owners but also to the business as well since it failed to address the customer needs (Miles 2012). Analysing this notion seems to reveal some truths in it though it also has some demerits, which could lead to negative impacts on the society. Lately, many companies have adopted stakeholder theory as a way of increasing profitability. The approach seeks to place the people seen as important to a business in a higher position (Miles 2012). That is to say, all actions taken by a corporate are focused on benefitting these people first. In this approach, the major people regarded highly include the owners, shareholders, customers, suppliers and in some case even competitors. Since this approach focuses on the most important stakeholder in the business- the customer to be precise- a number of benefits are evident. Freeman suggested that whenever a business applies the stakeholders even the shareholders’ interests are safeguarded. Additionally, when this approach is adopted, the business will last longer and even exhibit performance (Miles 2012). This is because businesses are able to analyze the needs by various stakeholders