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Even before Preston (1975) issued an intellectual call-to-arms, scholars in the field of inquiry called business and society sought a paradigm or an integrating framework for topics thought to be central to the discipline. Various models--corporate social performance, social control of business, and stakeholder--have been advanced as part of this search.
This article attempts to advance the case for using the stakeholder model as an integrating theme for the field by proposing a formal instrumental theory of stakeholder management. The theory represents a synthesis of the stakeholder concept, economic theory, insights from behavioral science, and ethics. The argument begins with a brief history of the search for a paradigm in the business and society field followed by a discussion of the stakeholder model as theory. Assumptions that underlie the theory are then offered along with discussions of the nature of contracting, efficient contracting, and the role of ethics in efficient contracting. An argument is presented for corporate morality as an analog to individual morality. At this point, the instrumental stakeholder theory is formally presented, followed by several research propositions. Implications and extensions of the theory and a brief conclusion complete the article.
THE QUEST FOR BUSINESS AND SOCIETY PARADIGM
Although the business and society field has had at least a nominal presence at numerous business schools for over two decades and has experienced considerable growth since then in terms of faculty membership in academic organizations and numbers of outlets for scholarly articles, it has been plagued by the lack of a widely accepted paradigm or integrating framework. Preston (1975) crystallized the views of many scholars in the field when he challenged them to develop such a paradigm. Carroll (1979) provided an initial impetus for these efforts by proposing that corporate social performance could serve as an integrating theme for the field. Jones (1982) offered a social control of business framework as an (implicit) alternative to Carroll's proposal. Jones's model appeared to be a mirror image of Carroll's model because it was focused on the firm from a vantage point that was largely external to the firm, whereas the corporate social performance model was focused directly on the firm. It seems that Carroll's view has been more widely accepted because other scholars subsequently have developed and...