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The stakeholder perspective of CSR

Stakeholders can be seen as those individuals and institutions that are influenced by the firm's actions or inactions (Freeman 1984). The stakeholder perspective of CSR argues that, as business firms are influenced by a variety of stakeholders, it is important to act 'responsibly' towards all of them. This is known as stakeholder theory.

Activity 1.2

Watch the following short video by Freeman where he talks about his stakeholder theory. Make notes while you watch this video as you may need them for a later task.

What is Stakeholder Theory? - R. Edward Freeman

View What is Stakeholder Theory? video transcript

One can argue that business firms should fulfil economic and legal responsibilities primarily towards their shareholders, but it should also uphold its ethical and discretionary responsibilities towards other stakeholders, such as employees, community residents, consumers and various interest groups.

However, business firms face a conflicting dilemma, especially when taking business decisions with outcomes which could either harm or benefit different stakeholders.

Activity 1.3

Case Snapshot: The Kellogg Company and Stakeholder Engagement.

Read the Kellogg Stakeholder Engagement Case Study.

Discuss the following questions with your peers using the Discussion Forum:

Who are Kellogg's stakeholders and what benefits does stakeholder engagement ultimately bring to the company? Could Kellogg survive without stakeholder engagement?