Six Good Reasons to Include Competitors as Stakeholders

9 Pages Posted: 22 Jul 2009

Date Written: April 11, 2006

Abstract

In crafting their definition of a stakeholder , Post, Preston and Sachs (PPS) paraphrase what they call “Freeman’s loose statement” that a “stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the activities of an organization (p.18 PPS).” Mapping this definition of a stakeholder onto a quotation plucked from the OECD, PPS go on to characterize Freeman’s definition as “absurdity (p.19),” because it includes an organization’s competitors as stakeholders. PPS defend this “narrowing” of the definition of a stakeholder with the assertion that competitors interests are “directly opposed” to those of the focal corporation. Because I agree that, “…stakeholder management is necessarily an ongoing process, flexible and situation specific (p.26 PPS)”, I take issue with the omission of competitors from stakeholder evaluation. In this short paper I will offer six good reasons why the competition should always be on the stakeholder map.

Keywords: stakeholders, stakeholder, stakeholder theory, Freeman, Post, Preston, Sachs, competitors, competition, trade associations, mergers, M&A, JV, joint venture, alliances,customers, coopetition, regulation, regulators, transparency

JEL Classification: D21, D41, F1, G30, G34, G38, H32, L10, L20, M10

Suggested Citation

Archer, PhD, Geoffrey Russell, Six Good Reasons to Include Competitors as Stakeholders (April 11, 2006). Available at SSRN: https://ssrn.com/abstract=1437117 or http://dx.doi.org/10.2139/ssrn.1437117

Geoffrey Russell Archer, PhD (Contact Author)

Royal Roads University ( email )

2005 Sooke Road
Victoria, British Columbia V9B 5Y2
Canada

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