I really enjoyed the overview of Stakeholder Theory video by Ed Freeman. I have realized over the past few weeks that I want to have my paper 1 focus on the benefits of stakeholderism, and how shareholderism can leave a company exposed to severe potential risks. Therefore, I found this Ed Freeman video to be very helpful, a strong supplement to enhance my paper. My first question I had before watching the video revolved around what happens in stakeholderism when there is a perceived conflict between the interests of two or more of the stakeholders. Freeman answers this question at the 14.00 minute mark of the video, and he uses the example of the interests of customers vs. the interests of the environment. Freeman talks about car companies creating engines that protect the environment as well as meeting the needs and wants of the customers driving the cars. He uses this as an example of value creation, which in the stakeholder theory is the process of all the different stakeholders working together to create value. A car company that followed the shareholderism approach would probably sacrifice the environment as long as profits remained high. However, they could struggle as environmental awareness grew.
The other question I had about Freeman was how he felt about people constantly pitting shareholders vs. stakeholders. It seems as though the two are always put against each other like the Red Sox and the Yankees. However, it appeared to me that stakeholderism fully incorporates shareholderism, and it simply takes shareholderism to the next level. It turned out that Freeman agreed with my suspicions. He even goes as far as to say that if Milton Friedman were alive today, he believes Friedman would have been in favor of stakeholder theory. Freeman can’t stand how people are always matching the two theories up against each other. Overall, I found the video extremely helpful as I move forward with my paper this week, and I am disappointed I was not able to see Freeman in person on Thursday.