Stakeholder Theory Of Conscious Capitalism
John Muir, a pioneer in naturalist, once quoted that “when you tug at a single thing in nature, you find it attached to the rest of the world.” This meaningful quote can be applied to business management, which is a subject that has interconnected relationships with different stakeholders. While people generally perceive the purpose of doing business is to maximize the return on investment for their shareholders, Professor R.E. Freeman believes on conscious business, which is also known as conscious capitalism. Conscious business emphasises on its ecosystem. It aims to create and optimise value for all stakeholders of the business, where this act is suggested to be able to lead a healthy, sustainable and resilient business, thereby to maximise the shareholders’ wealth.
Conscious business comprises four arms: Purpose, Culture, Leadership and Stakeholders (Figure 1). With reference to the title, this text focuses on the Stakeholder Theory of conscious capitalism.
Figure 1. Conscious Capitalism
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This is because without the stakeholders such as employees, customers, suppliers, funders, supportive communities and life-sustaining ecosystem, business and profit would not exist. In the other words, in order to make a business successful, the business must create values for all its stakeholders. Professor R.E. Freeman suggests that if we only focus on the interest of the shareholders alone, capitalism does not
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