Stakeholder Theory and Globalization: The Challenges of Power and Responsibility

Globalization is a blind spot in stakeholder theory and this undermines its explanatory power and usefulness to managers in global corporations. In this paper we build on Edward Freeman and colleagues’ attempts to construct divergent stories about how to create value for the corporation and its stakeholders when developing a stakeholder theory that is more sensitive to globalization. We achieve this by highlighting two particular challenges that globalization brings to stakeholder theory. The first challenge is to acknowledge new power relations (sub-political movements, new forms of bureaucracy and hierarchy) and the second is to acknowledge new dimensions of responsibility (a political responsibility). In the paper we relate our developments of stakeholder theory to two previously published case studies.