Characteristics of Stakeholder Theory
Characteristics
of Stakeholder theory can be explained in term of multiple objectives, director
are not agent, and responsibility toward society.
- 1. Internal & External Stakeholder
There
are number of stakeholder for any organization, which can be broadly classified
into internal stakeholder i.e. Employees, supplier and external Stakeholder
like Government.
- 2. Stakeholder are important
Stakeholder
theory believes that stakeholder is important for the business, and therefore organization
should adopt appropriate policies to cater their concern and safeguard their
interests.
- 3. Multiple Objectives
Stakeholder
theory believes there are number of objectives for an organization. There are different stakeholders and each stakeholder interest is to be safeguarded by
the organization.
- 4. Directors are not Sole Agent
Director
cannot be regarded as sole agent of the shareholder; rather they are
responsible to safeguard the interests all stake holders.
- 5. Responsibility toward Society
Company
also has responsibility toward the society. Therefore due consideration should
be given to the issues which effects the society like environmental issues. The
example of environmental issues is emission of carbon, noise and pollution,
depletion of natural resources.
