Should a Manager be Considered a Stakeholder in a Business?

Should a Manager be Considered a Stakeholder in a Business?

In the realm of business ethics and stakeholder theory, the question of whether a manager should be considered a stakeholder often sparks debate. Stakeholders are typically defined as individuals or groups that have a vested interest in the operations and outcomes of a business. Managers, as key decision-makers and leaders within an organization, wield significant influence over its direction and performance. This essay will delve into the arguments for and against considering a manager as a stakeholder in a business, drawing insights from scholarly sources, business examples, and ethical considerations.

The Case for Considering Managers as Stakeholders

1. Responsibility and Accountability:

– Managers carry a substantial burden of responsibility for the strategic decisions, operational management, and overall performance of a business. As such, they have a direct stake in the outcomes and success of the organization. Recognizing managers as stakeholders acknowledges their vested interest in driving the company’s growth and sustainability.

2. Ethical Leadership:

– Ethical leadership entails prioritizing the interests of all stakeholders, including employees, customers, shareholders, and the broader community. Managers who embody ethical principles and advocate for stakeholder value creation align with stakeholder theory, which emphasizes the importance of balancing diverse interests for long-term success.

3. Employee Well-Being:

– Managers play a pivotal role in fostering a positive work environment, supporting employee development, and ensuring staff engagement. By considering managers as stakeholders, organizations acknowledge the impact that managerial decisions have on employee well-being, job satisfaction, and overall morale.

The Case Against Considering Managers as Stakeholders

1. Agency Theory Perspective:

– From an agency theory perspective, managers are viewed as agents acting on behalf of shareholders, who are the primary stakeholders in a business. This perspective emphasizes the separation between ownership (shareholders) and control (managers), suggesting that managers’ interests should align with maximizing shareholder wealth.

2. Conflict of Interest:

– Recognizing managers as stakeholders could blur the lines of accountability and create potential conflicts of interest. Managers may prioritize their personal or departmental objectives over broader stakeholder considerations, leading to decisions that are not in the best interest of the organization as a whole.

3. Accountability to Multiple Stakeholders:

– While managers undoubtedly play a critical role in organizational success, their accountability extends to fulfilling their duties as employees entrusted with specific responsibilities. Including managers as stakeholders may dilute the focus on other stakeholder groups that also contribute to the company’s value creation.

Integration of Biblical Ideas

From a biblical perspective, the concept of stewardship is central to understanding the role of managers within an organization. In the parable of the talents (Matthew 25:14-30), individuals are entrusted with resources and responsibilities by their master. Similarly, managers are stewards of the resources, people, and decisions entrusted to them within a business context. Recognizing managers as stakeholders aligns with the biblical principle of accountability, where individuals are called to manage resources wisely and ethically for the greater good.

Conclusion

In conclusion, the question of whether a manager should be considered a stakeholder in a business entails complex considerations related to responsibility, accountability, ethical leadership, and conflicting perspectives. While arguments can be made both for and against this designation, it is essential for organizations to recognize the pivotal role that managers play in shaping organizational outcomes and fostering stakeholder value creation. By integrating biblical principles of stewardship and accountability, businesses can strive to align managerial actions with ethical standards and holistic stakeholder interests for sustainable success.

References

– Jones, T. M., & Wicks, A. C. (1999). Convergent Stakeholder Theory. Academy of Management Review.
– Freeman, R. E., & Reed, D. L. (1983). Stockholders and Stakeholders: A New Perspective on Corporate Governance. California Management Review.
– Holy Bible: New International Version. Zondervan.
– Business Ethics: Concepts and Cases (Chapter 4: Corporate Social Responsibility). OUP Oxford.