The Evolution of the Stakeholder Theory
Accordingly, this theory was initially held as a business strategy during the early introduction of industrialism. The objective was basically the same --- to embrace the “interest groups” existing within the society as a means to enhance business relationships. Doing so increases a business entity’s chances of gaining financial success.
However, during the 1980s through the 1990s, consumer advocacy groups, community advisory committees and other concerned blocs, pushed for the restatement of the stakeholder definition. The movement was spurred by the growing number of business organizations that disregarded business ethics, by deliberately misleading those who relied on corporate decisions and actions.
These resulted to corporate excesses, which were manifested in the forms of industrial accidents, and other untoward incidents that resulted to environmental damages (e.g. illegal discharge of toxic wastes, forest fires, forest denudation, groundwater contamination, etc.), stock manipulations, white-collar frauds and business scandals involving political collusions.
Thus, stakeholder theory came to broach more than just the financial rewards of capitalism but has to encompass the interest of those affected by business policies and activities. These are the employees, consumers, suppliers, creditors and all others that have significant contributions or circumstantial relevance to capitalistic ventures.
Hence, the concept of embracing the needs of interest groups became a formal study of its discipline and the need to acquire adequate knowledge of new and existing federal, state or local laws, regulations and initiatives as well as business ethics. The matter of ownership came to include taking responsibility for and becoming answerable to the consequences of any moral turpitude.
These are the premises on which the practice of stakeholder analysis works-on.