Stakeholder Theory

Stakeholder theory is a framework in corporate governance that emphasizes the importance of considering the interests and needs of all stakeholders involved in an organization. It posits that businesses should not solely focus on maximizing shareholder value but also take into account the expectations of other stakeholders such as employees, customers, suppliers, communities, and the environment.
Stakeholder theory recognizes that these diverse groups have a significant impact on the organization's success and sustainability. By actively engaging and managing relationships with stakeholders, organizations can create shared value, build trust, and foster long-term relationships, ultimately leading to enhanced organizational performance and societal well-being.