Stakeholder theory and managerial decision-making: Constraints and implications of balancing stakeholder interests

Abstract

journal of business ethics (2006) 64: 285–301 doi 10.1007/s10551-005-5493-2 (cid:1) springer 2006 stakeholder theory and managerial decision-making: constraints and implications of balancing stakeholder interests scott j. reynolds frank c. schultz david r. hekman abstract. stakeholder theory is widely recognized as a management theory, yet very little research has considered its implications for individual managerial decisionmaking. in the two studies reported here, we used stakeholder theory to examine managerial decisions about balancing stakeholder interests. results of study 1 suggest that indivisible resources and unequal levels of stakeholder saliency constrain managers’ efforts to balance stakeholder interests. resource divisibility also influenced whether managers used a within-decision or an across-decision approach to balance stakeholder interests. in study 2 we examined instrumental and normative implications of these two approaches. we conclude by considering the contributions of this research. key words: stakeholder management, ethical decision-making, balancing stakeholder interests the recent rash of corporate scandals has brought more and more attention to the concept of stakeholder management. in short, stakeholder theory scott j. reynolds is an assistant professor of business ethics at the university of washington business school. his research interest is in the area of individual ethical decision-making. his research has appeared in the journal of applied …

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