Stakeholder theory essay

Friedman’s shareholder theory is in the true spirit of capitalism. Contrary to Friedman’s argument, stakeholder theory states it is the mandate of a company to satisfy the needs of all groups without whose support, the organization would stop to exist (Freeman, 2010). Such parties include suppliers, employees, local community, media, environmental groups, government entities, and financial groups among others. Stakeholders’ theory posits that the well-being of a company is defined by its ability to ensure that all these players within their ecosystem are content with how the firm conducts business. Freeman argues that stakeholder theory benefits an organization more especially in the long term. Italian firm, Assicurazioni Generali is a good example in implementation of this approach. The company’s code of conduct offers everybody working for and on behalf of the company a chance to air the concerns about any of their operations.