Business Ethics: Stakeholder Theory
Corporations have obligations to all stakeholders (employees, suppliers, customers, communities, environment, shareholders) rather than solely to shareholders.
Real World
When Volkswagen installed emissions-cheating software in 2015, it prioritised shareholder profit over obligations to customers, regulators, and the environment — a textbook failure of stakeholder theory.
Exam Focus
Distinguish stakeholder theory from shareholder theory clearly; examiners penalise conflation of the two positions.
How well did you know this?