Stakeholder theory
Stakeholder theory considers an organisation’s relationships with groups and individuals who affect or are affected by its activities. Different approaches may describe these relationships, examine their consequences for organisational success, or argue that stakeholders have legitimate interests deserving consideration in their own right. These approaches should not be collapsed into a claim that every stakeholder always has identical rights or priority. Applying the theory still involves evidence, duties and judgment when interests conflict.
Worked example
A company considers employee safety, customer reliability, supplier sustainability and investors’ returns when evaluating a sourcing decision. It identifies legitimate concerns and trade-offs rather than assuming that maximising a single short-term financial indicator represents every stakeholder’s interests.
Common mistake
Assuming stakeholder consideration means all claims must be accepted equally or confusing the normative justification with the instrumental argument that stakeholder relationships can support performance.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| ACCA | SBL | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |