From “the stakeholder” to stakeholder theory

Abstract

The term stakeholder (“partie prenante” in French) is used in different ways by specialists and members of the public. For the wider public, it is a generic term, equivalent to “citizen,” to anyone taking part in public life. For specialists, it refers to people who are not shareholders. In fact, “partie prenante” is an imperfect translation of the English stakeholder, literally the “holder” of a “stake.” Less literally, stakeholder means he, or she, who has a stake in something. More broadly, it means someone who participates or “takes part” in something (“prendre partie,” hence “partie prenante”). In English, the term stakeholder is a neologism which plays on the term stockholder (designating those who share the profits, including the shareholders). The term indicates that parties other than stockholders can have a say and that their stakes and interests in the activities of the firm should be recognized (Freeman and Reed 1983). It defines individuals and groups of individuals indispensible to the survival of the firm and who are either consulted or participate directly in decision-making processes or arbitrage. But from which point of view is the question of survival to be considered: from that of the firm or that of the stakeholder? It is for this reason that some Francophone authors prefer the term “partie intéressée” (“interested party”) (Benseddik 2006) or “ayant droit” (“rights holder”) (Mercier 2006). Perhaps not surprisingly, for the Swedish administrative research school of the 1960s, represented by Rhenman and Stymne (1965), the notion of the stakeholder is seen as reciprocal relationship in which a stakeholder is a group which depends on the firm in order to achieve its own objectives and on which the firm depends for its survival.