Volume 4, 1993
Proceedings of the Fourth Annual Meeting
Pages 149-162
A Stakeholder Theory of the Firm
Building on Preston, Carroll, Wartick and Cochran, and Wood
This article describes the results of empirical tests, over a period of five years, of the theories and models of Corporate Social Performance proposed by Preston, Carroll, Wartick and Cochran. It was found that these theories and models lacked empirical reality. The data from mote than forty field studies of corporate social performance showed that these ferns were managing relationships with their primary stakeholders groups rather than with society as a whole. When the level of analysis is society, it is appropriate to define and analyse social issues and responsibilities; when the level of analysis is the corporation, it is appropriate to define and analyse stakeholder issues and responsibilities. As a consequence of clarifying the appropriate level of analysis, earlier models of CSP have been revised in order to reflect empirical reality. Based on four years of testing and applying the new model, a stakeholder theory of the firm is proposed and several predictive propositions are advanced for testing.