A variety of forces are changing the way managers and executives make sense of their responsibilities. Globalization has brought a larger variety of participants into contemporary businesses, technological innovation has increased the pace of change, and managers are discovering that their actions have the potential to affect a broader range of people all over the globe (Clement, 2005). Additionally, the pursuit of corporate objectives can be easily disrupted by the actions of unexpected groups. These challenges, driven by change and interconnectedness, reveal a need for managers and academics to re-think the traditional ways of conceptualizing the responsibilities of the firm.

Fortunately, for the last 30 years a growing number of scholars and practitioners have been experimenting with concepts and models that facilitate our understanding of the complexities of today’s business challenges. Among these, “stakeholder theory” or “stakeholder thinking” has emerged as a new narrative to understand and remedy three interconnected business problems—the problem of understanding how value is created and traded, the problem of connecting ethics and capitalism, and the problem of helping managers think about management such that the first two problems are addressed. In this article, we review the major uses and adaptations of stakeholder theory in a variety of disciplines such as business ethics, corporate strategy, finance, accounting, management, and marketing. We also evaluate these uses in terms of how they help or hinder the original goals of stakeholder theory, and suggest future directions in which research on stakeholder theory can continue to provide useful insights into the practice of sustainable and ethical value creation.

Document Type

Post-print Article

Publication Date


Publisher Statement

Copyright © 2010 Academy of Management. Article first published online: October 2017.

DOI: 10.5465/19416520.2010.495581.

The definitive version is available at: https://

Full Citation:

Parmar, Birhan L., R. Edward Freeman, Jeffrey S. Harrison, Andrew C. Wicks, Lauren Purnell and Simone de Colle. "Stakeholder Theory: The State of the Art." Academy of Management Annals 4, no. 1 (2010): 403-445.