Jones, T. M., Wicks, A. C. 1999.

Convergent Stakeholder Theory
Author(s): Thomas M. Jones and Andrew C. Wicks

Source: The Academy of Management Review, Vol. 24, No. 2 (Apr., 1999), pp. 206-221
Published by: Academy of Management
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? Academy of Management Review
1999, Vol. 24, No. 2, 206-221.
CONVERGENT STAKEHOLDER THEORY
THOMAS M. JONES
ANDREW C. WICKS
University of Washington
We describe two divergent approaches to stakeholder theory-a social science ap-

proach and a normative ethics approach-and examine their differences and simi-
larities. Since neither approach is complete without the other, we propose a new way
of theorizing about organizations: the development of normatively and instrumentally
sound convergent stakeholder theory. This form of theory is explicitly and unabash-
edly normative, demonstrating how managers can create morally sound approaches
to business and make them work.
Among academics in general and manage- One purpose of this article is to examine the
ment scholars in particular, there appears to be nature of this divergence and propose a means
a growing interest in what has been broadly of unification of these two perspectives. Our
termed the stakeholder concept. In 1995 Donald- central argument is that neither of the emergent
son and Preston reported that over 100 articles forms of stakeholder theory is complete without
and about a dozen books on the stakeholder the other and that convergent stakeholder the-
concept had appeared in the management liter- ory, which combines normative and instrumen-
ature alone. A majority of the October 1994 issue tal elements, meets many of the criteria for suc-
of the Business Ethics Quarterly is devoted to the cessful integration of normative and empirical
topic, and the first two articles of the October theory. We also argue that convergent stake-
1997 issue of the Academy of Management Re- holder theory, by being explicitly and unabash-
view also focus on stakeholder issues. edly normative, represents a new way of theo-
The term stakeholder concept, however, is rel- rizing about organizations; in the terminology of
atively vague and, thus, gives little direction to Bacharach (1989), it is fundamentally transfor-
either the study or the practice of management. mational. Unlike other theories of organization,
Fortunately, the recent article by Donaldson and it demonstrates how managers can create ways
Preston (1995) has added considerable coher- of doing business that are both moral and work-
ence to the stakeholder concept as theory and able.
has provided a taxonomy of stakeholder theory Our argument involves discussions of the fol-
types. However, in the disciplines in which lowing:
stakeholder theory has struck the most respon-
sive chord-business and society and business 1. recent developments in stakeholder theory
ethics-a significant divergence of perspective research,
2. the emergence of two divergent approaches
seems to be gathering momentum. One group of
to stakeholder theory (a social science ap-
scholars views stakeholder theory as a potential
proach and an ethics-based approach),
foundation for the growth of social science- 3. areas of agreement and disagreement be-
based research; another views stakeholder the- tween adherents of the two approaches,
ory as an umbrella term describing a class of 4. a proposed convergent approach to stake-
narrative accounts, each based on its own moral holder theory development,
5. the extent of integration of normative and
principles.
empirical theory in convergent stakeholder
theory, and
6. the relationship of convergent stakeholder
theory to other theories of organization.
We presented the original version of this article at the
Society for Business Ethics annual meeting in Quebec City
Because the discussion that follows applies to
in August of 1996. We are indebted to Lori Verstegen Ryan,
Shawn L. Berman, Dennis P. Quinn, and three anonymous theory in a relatively primitive stage of develop-
reviewers for helpful comments on earlier versions of the ment, many statements regarding agreement
manuscript. among scholars are based on our impressions of
206
1999 Jones and Wicks 207
their work. Since few review articles exist on the some structure to early stakeholder theorizing.
subject of stakeholder theory, we base conclu- The three-part typology used by these authors-
sions regarding agreement or consensus on the normative, instrumental, and descriptive/empir-
absence of apparent controversy-not empirical ical-makes explicit some traits that early for-
evidence. Lack of agreement is documented, mulations of stakeholder theory left implicit.
wherever possible, with reference to the contro- These early formulations suggested (often si-
versy in question. multaneously) that (1) firms/managers should
behave in certain ways (normative), (2) certain
outcomes are more likely if firms/managers be-
THE CURRENT STATE OF STAKEHOLDER
have in certain ways (instrumental), and
THEORY RESEARCH
(3) firms/managers actually behave in certain
We begin by outlining the basic domain of ways (descriptive/empirical). In the article
stakeholder theory. The essential premises of Donaldson and Preston express concern that,
stakeholder theory are as follows: with the possible exception of the normative
variant, none of the theoretical formulations of
1. the corporation has relationships with
the stakeholder concept is either formally stated
many constituent groups ("stakeholders")
that affect and are affected by its decisions or fully developed.
(Freeman, 1984); Donaldson and Preston's typology also helps
2. the theory is concerned with the nature of stake out the intellectual domains of two broad
these relationships in terms of both pro-
groups of scholars interested in stakeholder the-
cesses and outcomes for the firm and its
stakeholders; ory. For the purpose of charting recent develop-
3. the interests of all (legitimate) stakehold- ments in the literature, research in stakeholder
ers' have intrinsic value, and no set of in- theory can be usefully grouped into two some-
terests is assumed to dominate the others what broader categories: (1) social science-
(Clarkson, 1995; Donaldson & Preston, 1995);
based theory, including instrumental and de-
and
4. the theory focuses on managerial decision
scriptive/empirical variants, and (2) ethics-
making (Donaldson & Preston, 1995). based theory focusing on normative issues.
Although instrumental theory is also empirical
This description represents the view of the pub-
in nature, and might more accurately be called
licly held corporation and its environment
instrumental/empirical theory, we retain the
adopted by many stakeholder theorists in both
term instrumental and shorten descriptive!
academic papers and textbook applications
empirical to descriptive to simplify the discus-
(e.g., Carroll, 1993; Evan & Freeman, 1983; Jones,
sion that follows. We now turn to descriptions of
1995a; Post, Frederick, Lawrence, & Weber, 1996).
the social science and normative ethics versions
Although this domain description is similar to
of stakeholder theory.
that of other theories of organization on some
dimensions, it is unique in its reluctance to as-
sume the predominance of one stakeholder Stakeholder Theory As Social Science
group-that is, shareholders-and its normative
The importance of stakeholder theory for
assumption that the interests of all stakeholder
scholars with a social science orientation is cap-
groups have intrinsic value. We agree with
tured in this question: Can good social science
Donaldson and Preston (1995), who argue that
research be done under the rubric of stakeholder
although stakeholder theory could be applied to
theory? A preliminary question for this group
other organizations, doing so at this point need-
would be: What might descriptive and instru-
lessly complicates the central issues.
mental stakeholder theory look like?
The explication of three types of stakeholder
Descriptive stakeholder theory. Jones (1994)
theory by Donaldson and Preston (1995) lends
briefly explores some possibilities for descrip-
tive theory-theory that purports to describe ac-
tual behavior. Focusing on the belief that theory
' There is widespread agreement that an important dis-
in the organizational sciences must include fal-
tinction exists between legitimate and nonlegitimate stake-
sifiable
holders. Since a discussion of the issue here would take us claims (Bacharach, 1989; Whetten, 1989),
he suggests that (at least) two stakeholder theo-
too far afield, we refer the reader to Donaldson and Preston
(1995) and to Mitchell, Agle, and Wood (1997). ry-based propositions qualify as legitimate the-
208 Academy of Management Review April
oretical claims, and one of these appears to be concentrate our attention on instrumental the-
unique to stakeholder theory: ory, which we feel holds greater promise.
Instrumental stakeholder theory. Stakeholder
Managers behave as if stakeholders mattered be-
theorists with a social science orientation may
cause of the intrinsic justice of their (the stake-
also have an interest in instrumental theory-
holders') claims on the firm (Jones, 1994: 100).
theory that posits that certain outcomes will ob-
Evidence could be marshaled to show that man- tain if certain behaviors are adopted. Instrumen-
agers do not behave as if stakeholders had mor- tal theory is contingent theory: the predicted
ally valid claims on the firm. Indeed, in various outcomes are contingent on behavior of a cer-
studies researchers have investigated claims of tain type. It does not require the theorist to make
this general type and found some support for simplifying assumptions about the fundamental
them (e.g., Clarkson, 1995). Although this propo- nature of human behavior, such as the assump-
sition is theoretically interesting and empiri- tion of self-interest (or opportunism) made by
cally tractable, claims of this type do not fully economists. This virtue obviates the difficulties
exploit the possibilities for stakeholder-based associated with oversimplifying human behav-
descriptive theory. A descriptive stakeholder ior (resulting in models that predict poorly) or
theory of the firm, for example, would create a overcomplicating human behavior (resulting in
wealth of research possibilities and would prob- models that are hopelessly complex).
ably catapult stakeholder theory into the ranks One form of instrumental stakeholder theory
of major theories of organization. has been advanced by Jones (1995a), who makes
The work of Brenner and Cochran (1991) con- a theoretical case for the general proposition
stitutes an early effort to provide a descriptive that if firms contract (through their managers)
stakeholder theory of the firm. Jones (1994) de- with their stakeholders on the basis of mutual
scribes Brenner and Cochran's contribution as trust and cooperation, they will have a compet-
"theoretically more aggressive" than the re- itive advantage over firms that do not. No as-
search proposition regarding managerial be- sumption is made that managers will try to de-
havior discussed above, because it suggests a velop trusting and cooperative relationships
relationship between various stakeholder traits with stakeholders, but an argument is made that
and situational characteristics and the deci- if they do, competitive advantage will result. He
sions that firms actually make. The following describes several behaviors that reveal mana-
statement describes the postulated relationship: gerial opportunism and make it difficult for
firms to develop mutually trusting and coopera-
The stcakeholder theory of the firm posits that thetive relationships with their stakeholders. For
nature of an organization's stakeholders, their example, his Propositions 2, 4, and 7 make the
values, their relative influence on decisions and
following theoretical claims:
the nature of the situation are all relevant infor-
mation for predicting organizational behavior
(Brenner & Cochran, 1991: 462). * Firms that do not adopt poison pills will
outperform firms that do adopt these de-
Unfortunately, this formulation is empirically vices (Proposition 2; 1995a: 424).
* Firms with disproportionately high levels of
less tractable than the previous claim. How
executive compensation will perform less
could one disprove this general proposition? Al- well than firms without high levels of exec-
though these authors argue that "values which utive compensation (Proposition 4; 1995a:
are highly weighted should be favored in actual 426).
choice situations" (1991: 462), they stop short of * Firms that contract out work formerly done
by employees will perform less well than
either substantive prediction or description of
those that do not follow this practice (Prop-
the mechanism(s) through which the predicted osition 7; 1995a: 427).
behavior might occur. It appears that Brenner
and Cochran's approach to a descriptive stake- These empirical claims are relatively
holder theory of the firm needs to be more fully straightforward and methodologically tractable,
developed before any testing can take place. as long as one employs conventional financial
Thus, although some possibilities exist for the measures of corporate performance. However,
development of descriptive stakeholder theory, one of the central (normative) tenets of stake-
we leave them to other scholars. Instead, we holder theory is that firms should attend to the
interests of all of their stakeholders-not just understandings of business in which these ob-
their stockholders. It follows that the perfor- jectives are linked and mutually reinforcing.
mance of firms encompasses more than finan- These researchers seek alternative accounts
cial performance alone. A broader measure, that could guide business activity in more con-
such as corporate social performance (CSP), structive ways. They maintain that the lan-
widely employed in the business and society guage, conceptual schemes, metaphors, and im-
field (Carroll, 1979; Wartick & Cochran, 1985; ages that individuals have of business activity
Wood, 1991a,b), is needed. Jones (1995b) argues make a difference in how they think and act
that two methods of measuring CSP-(1) data (Jones, 1988-89; Wicks et al., 1994)-a view con-
envelopment analysis (DEA) and (2) "halo- sistent with institutional theory in the organiza-
removed" reputational surveys (Brown & Perry, tion sciences (DiMaggio & Powell, 1983, 1991;
1994)-are promising solutions to the measure- Meyer & Rowan, 1977)-and that these represen-
ment problem. With the advent of testable the- tations influence individual conceptions of what
ory and some viable means of operationalizing constitutes "reasonable" strategic action. In
the relevant dependent variable, it seems that Weick's (1979) language, these scholars seek
an instrumental form of stakeholder theory can means by which people can "enact" different
meaningfully be called social science. environments. Although advocates of this ap-
proach do not so state, their work has significant
affinities with one research paradigm in organi-
zation studies-the "interpretivist" view (Berger
Stakeholder Theory As Normative Ethics
& Luckman, 1966; Morgan & Smircich, 1980),
Some stakeholder theorists take an approach which assumes that "people socially and sym-
that differs substantially from orthodox ("func- bolically construct and sustain their own organ-
tionalist") social science. Rather than collecting izational realities" (Gioia & Pitre, 1990: 588)-
data and using scientific methods to test hy- and some similarities to "radical humanism,"
potheses, this group focuses on normative is- which shares this subjectivist view of organiza-
sues. This mode of inquiry involves specifying tional reality but takes a more evaluative, even
what moral obligations stakeholder theory critical, stance.
places on managers, particularly the relative For advocates of narrative interpretation, the
importance of obligations to shareholders and challenge of stakeholder theory is not to develop
those to other stakeholder groups (Boatright, a single (descriptive or instrumental) stake-
1994; Clarkson, 1995; Goodpaster, 1991; Good- holder theory as the social scientists might pre-
paster & Holloran, 1994; Quinn & Jones, 1995). A fer but to develop and evaluate a broad array of
common theme among these scholars is that narrative accounts regarding the nature and
firms ought to treat stakeholders as "ends" purposes of the firm and the activities of people
(Evan & Freeman, 1983) or ought to view the who work for it. They incorporate insights from
interests of stakeholders as having intrinsic both ethics and business, without drawing a
value. sharp distinction between the two (Freeman,
One strain of normative stakeholder theory, 1994; Wicks, 1996).
which we call "narrative interpretation," in- Freeman (1994) describes this process as the
volves the creation of narrative accounts of development of normative cores: accounts that
moral behavior in a stakeholder context. Adher- describe the basic functions of the firm (its telos
ents of this perspective develop alternative de- or mission) and the responsibilities of manag-
scriptions of business so that managers can in- ers. (What are their primary obligations? How do
teract with stakeholders in a morally sound they treat people?) To date, ethicists have devel-
fashion. They focus on what the firm ought to do, oped several normative cores for stakeholder
both in terms of the ends it pursues and the theory: Kantian capitalism (Bowie, 1994; Evan &
means it utilizes, as well as why these "oughts" Freeman, 1983), fairness (Phillips, 1997), fair con-
are appropriate (Evan & Freeman, 1983; Free- tracts (Freeman, 1994), personal projects (Free-
man, 1994; Freeman & Gilbert, 1988; Wicks, Gil- man & Gilbert, 1988), and a feminist approach
bert, & Freeman, 1994). They seek not to shift the (Wicks et al., 1994). Others have developed meth-
focus of firms away from marketplace success ods for firms to develop such normative cores
and toward human decency but to come up with within parameters that are likely to make them
ethically sound (Gilbert, 1992). Even though realms: normative, instrumental, and descrip-
these researchers reject fundamental distinc- tive. In the view of narrative interpretation ad-
tions among the normative, instrumental, and vocates, the reductionism involved in employing
descriptive dimensions of stakeholder theory such a taxonomy is inappropriate and unpro-
(Freeman, 1994), there has been great emphasis ductive; there should be no sharp distinctions
in their work on the former aspect and no sys- among the three forms of stakeholder theory
tematic work on the latter two aspects. (Freeman, 1994). Moreover, no broad agreement
exists as to whether instrumental uses of stake-
holder theory (at least the forms that posit a link
AGREEMENT AND DISAGREEMENT AMONG
between ethical behavior and firm performance)
STAKEHOLDER THEORISTS
are important at all. Some ethicists believe that
Given that two approaches to stakeholder the- moral behavior need not be justified in instru-
orizing have emerged, an assessment of their mental terms; morality is, and must be, its own
points of agreement and disagreement must reward. To these scholars the most valuable
precede any discussion of the prospects for the- contribution of the currently available version of
oretical unification. In the discussion that fol- instrumental stakeholder theory (Jones, 1995a)
lows, stakeholder theory refers to all research may be that it predicts that certain forms of
that is related to the stakeholder concept; refer- moral behavior will not be penalized, at least in
ence to either of the two individual perspectives the long run.
is made explicit. A social science objection to the narrative ac-
For the purposes of the immediate discussion, counts perspective is that it fails to meet the
we postpone any commitment as to what form of standards of "good" research. Although many
unification is possible. A substantial portion of social scientists are willing to concede that le-
the April 1994 issue of the Business Ethics Quar- gitimate grounded theory can emerge from nar-
terly is devoted to the relationship between nor- rative accounts, they still are concerned about
mative ethics and empirical ethics. One set of some "quality control" issues. How is one to
authors in this issue (Weaver & Trevifio, 1994) discriminate between good and bad narratives?
proposes a hierarchy of levels of interaction be- Under the apparent criteria of the narrative in-
tween the two theoretical perspectives. We will terpretation approach, a seemingly endless
address the fit of our contribution into their tax- stream of such accounts could emerge-a
onomy later in the article. Regardless of the stream limited only by the imaginations of the
precise nature of that fit, we explore the devel- theorists engaged in creating them. A possible
opment of the normative and empirical perspec- answer to the quality control question is that
tives on ethics in the context of a specific area of good stakeholder theory would help people live
research: stakeholder theory. Our conclusion is morally enhanced lives without substantially
that the shared values and shared understand- harming either their corporations or their rela-
ings driving stakeholder research render funda- tionships with those corporations. To social sci-
mentally incomplete any theory that is either entists this response begs an important ques-
exclusively normative or exclusively instrumen- tion, however: How can we know which of these
tal. We argue that a hybrid form, which we call accounts provides such help without some the-
convergent stakeholder theory, is conceptually oretical support or empirical evidence? To date,
superior to either existing form. instrumental implications of various normative
cores have not been systematically developed.
Narrative interpretation advocates may view
Social Science and Narrative Accounts in
Conflict
such quality control efforts as attempts to create
forced agreement, close off discourse, and es-
In assessing the prospects for some form of tablish privilege for certain types of re-
hybrid stakeholder theory, we must first identify search-in short, to create "paradigm consen-
some areas of disagreement between the two sus" in the field (Cannella & Paetzold, 1994;
theoretical perspectives. A means of reconciling Wolin, 1980). They reject standards that bias
these views is the topic of later sections. To conceptions of good research toward "scientific"
begin with, disagreement exists over the propri- studies. More specifically, they reject the as-
ety of dividing the field into three theoretical sumption that the closer one gets to "normal
science" (Kuhn, 1970)-more consensus, nar- . Concern for others is a related normative
rower research questions, more sophisticated standard that stands in sharp contrast to pure
puzzle solutions-the more coherent, legitimate, self-interest. This general theme can be found
and "better" research becomes (Pfeffer, 1993; under several headings in the literature, includ-
Schendel & Hofer, 1979). Indeed, the narrative ing the corporate social responsibility debate
interpretation view questions the idea that what (Jones, 1980; Walters, 1977) and the moral sanc-
Kuhn (1970) calls normal science, and others tuary debate (Konrad, 1982), Kantian capitalism
have called functionalist social science (Burrell (Bowie, 1994; Evan & Freeman, 1983), feminist
& Morgan, 1979; Gioia & Pitre, 1990; Morgan & approaches (Wicks et al., 1994), expanded views
Smircich, 1980), is either desirable or possible of property (Donaldson & Preston, 1995), and
(Cannella & Paetzold, 1994; Feyerabend, 1975). agent morality (Quinn & Jones, 1995).
At bottom, the search for a hybrid theory may be * The compatibility of morality and capital-
seen by the narrative accounts advocates as a ism at a fundamental level also elicits wide-
misguided attempt to bring prestige and order spread agreement. Although, as noted above,
to stakeholder-based scholarship by moving the single-minded self-interest is rejected as a nor-
focus of research in precisely the wrong direc- mative standard, there is no apparent feeling
tion. among stakeholder theorists that acting in one's
own interests or making a profit is morally sus-
pect per se. Advocacy of a morally sound capi-
talism would provoke little dissent among
Social Science and Narrative Accounts in
stakeholder theory adherents.
Agreement or Partial Agreement
* There is a reasonable consensus as well on
The two perspectives on stakeholder theory the view that a healthy and efficient capitalism
represent divergent views on several issues, but requires a fairly high level of morality, a point
there are important areas of agreement as well. made earlier by Adam Smith, Schumpeter, and
In addition to a focus on the same academic Hayek (Caeldries, 1993).
domain and the same general set of problems, * Agreement on normative principles beyond
as outlined above, there are some shared values this point is partial or incomplete, however. In
and shared understandings among scholars general, although certain broad ethical consid-
about the nature of appropriate research. erations are deemed important by many stake-
Shared values. Agreement among stakeholder holder theorists, emphases differ markedly
theorists centers on the appropriate purpose(s) among them. For example, only one facet of util-
of the corporation and the behavior of the people itarianism, a normative standard that admon-
who populate it-its top managers in particular. ishes moral agents to maximize net social ben-
These shared values include the following nor- efits, is widely endorsed. Its universalism is
mative standards: retained; the maxim "stakeholders, not (just)
stockholders" suggests a concern for the welfare
* As noted above, belief in the intrinsic worth of all who are affected by corporate decisions-
of the claims of all legitimate stakeholders is not just a limited group of investors. However,
fundamental to stakeholder theory. It is the re- aggregate social welfare maximization, as
jection of the normative foundation of stock- called for by utilitarianism, is rejected by some
holder wealth maximization that led many stakeholder theorists-advocates of Kantian
stakeholder theory advocates to reject the neo- capitalism, for example.
classical theory of the firm and to adopt first the * A concern for distributive justice and fair-
doctrine of corporate social responsibility and ness is also widely held among stakeholder the-
then stakeholder theory. ory adherents, although the propriety of various
* Egoism, as a normative standard, is re- distributive principles will always be hotly de-
jected; neither individuals nor firms should exist bated (e.g., Nozick, 1974; Rawls, 1971). Similar
solely to serve their own ends (Bowie, 1991). conclusions can be reached for Kantian princi-
Businesses are instrumental institutions, exist- ples (respect for persons; the categorical imper-
ing to serve social purposes larger than their ative), as well as for notions of rights and the
own perpetuation or the wealth maximization of ethics of care (feminist ethics); they are seen as
their shareholders. legitimate moral considerations, but their pre-
cise application and their relative moral force dealing with one facet of the theory and ignor-
are matters of considerable controversy. In ing the other two (Freeman, 1994).
short, stakeholder theory advocates, particu- * If we can assume some agreement on the
larly the ethicists among them, are sharply di- descriptive usefulness of Donaldson and Pres-
vided on the appropriate moral foundation for ton's taxonomy, and hence on the potential ex-
stakeholder theory (and many other facets of istence of three types of stakeholder theory, we
human existence as well). may find there is room for agreement on the
conclusion that the development of a descriptive
In summary, although there is near universal
stakeholder theory of the firm is unlikely, at
concern for moral processes and outcomes, least in the short term. First, stakeholder theo-
based on the view that the claims of stakehold- rists view as inappropriate the reducing of hu-
ers have intrinsic worth, there is little agree- man behavior to the simple assumptions neces-
ment on what those moral processes and out- sary to make descriptive theory of this type
comes should be. Put another way, the meaningful (Jones, 1994). In particular, there
normative core of stakeholder theory is widely seems to be a widespread rejection of psycho-
seen to be moral in nature, but the source of that logical egoism (Etzioni, 1988; Margolis, 1984);
morality is not settled, and debate on its sources stakeholder theorists deem the assumption of
will probably continue into the foreseeable fu- self-interest or, more specifically, opportunism
ture. It follows that the normative pluralism ad- found in most forms of economic theory (Wil-
vocated by the narrative interpretation camp liamson, 1985) overly simplistic. Rather, most
may be a fact of life for the social science camp would probably agree that human behavior is
as well. Since a moral foundation is an impor- very complex. Elements of irrationality, altru-
tant feature of stakeholder theory, stakeholder ism, generosity, cooperativeness, integrity,
theory as a class of theories seems inevitable. truthfulness, and genuine concern for others, as
Shared understandings. Stakeholder theorists well as rational self-interest, characterize hu-
also share some general understandings re- man behavior; opportunism and simple self-
garding the theory and its applications. As in interest represent only one facet of human be-
the case of shared values, agreement tends to be havioral instincts. Thus, although stakeholder
present on some general aspects of the theory; theorists surely would not agree on the precise
agreement on the details is far less common. behavioral tendencies of human beings, they
probably could agree that those tendencies are
* To begin with, the above discussion of the
varied (human beings behave in a variety of
normative facets of stakeholder theory suggests
ways), variable (individual human beings do not
a measure of agreement on the existence of nor-
behave in a consistent manner), and malleable
mative, instrumental, and descriptive aspects of
(the behavior patterns of human beings can be
stakeholder theory. This tripartite taxonomy of
altered). This agreement means that a descrip-
stakeholder theory provided by Donaldson and
tive stakeholder theory of the firm, roughly anal-
Preston (1995) has been cited frequently by re-
ogous to the economic theory of the firm, may be
searchers (given its short academic life) and beyond the reach of contemporary stakeholder
seems to provide direction to some scholarly theorists.
endeavors. The first Toronto Conference on * There is a widely held conviction (among
stakeholder theory (1993), for example, was ori- proponents of what is now called instrumental
ented around this framework. Donaldson and theory) that firms that look after the interests of
Preston's classification scheme also has made it key stakeholders and behave in a morally de-
possible to differentiate the domain of ethi- fensible fashion will, all else being equal,
cists-normative theory with a clear moral com- achieve greater success in the marketplace than
ponent-from that of social scientists-instru- those that do not-that is, good CSP is related to
mental and descriptive theory-as we have good financial performance. The empirical work
done in this article. Despite some agreement done on this topic is extensive, but most of it is
over the potential existence of three types of atheoretical (Ullmann, 1985), and, in the aggre-
stakeholder theory, there is, as we noted above, gate, results are inconclusive (Griffin & Mahon,
a clear and definitive difference of opinion over 1997; Ullmann, 1985; Wood & Jones, 1995). (Para-
the propriety of the reductionism inherent in doxically, despite these disappointing results,
scholars undertake new studies on a regular holder theory is not only possible but probable.
basis.) Implicit in this discussion is agreement Thus, instrumental theorists should agree with
that the growing CSP literature (e.g., Carroll, the narrative interpretation advocates that the
1979; Wartick & Cochran, 1985; Wood, 1991a,b; emergence of a class of theories centered on
Wood & Jones, 1995) is relevant to the main stakeholder principles is appropriate.
themes of stakeholder theory, since both per- Next, it is clear that stakeholder theorists con-
spectives stress the importance of the interests sider normative issues to be of great impor-
of all corporate constituents. tance. Donaldson and Preston (1995) explicitly
* Although there is little agreement on spe- endorse this view and provide a property-based
cific methodologies, there is some very general normative foundation for stakeholder concerns.
consensus regarding an ideal measure of the Even though Jones (1995a) does not defend (or
firm's responsiveness to its stakeholders: a com- even make explicit) the normative core of his
posite measure of corporate outputs and pro- version of instrumental stakeholder theory, the
cesses, which includes the interests of all of the theory is based on principles-mutual trust and
firm's stakeholders. Scholars have employed a cooperation-that are morally defensible. Im-
wide variety of methods and measures in empir- portantly, based on the shared values discus-
ical research on CSP-a concept related to sion (above), most stakeholder theorists with a
stakeholder theory. social science orientation should agree that any
instrumental theory with its roots in the stake-
Thus, although there are substantial areas of
holder concept must have morally acceptable
agreement among stakeholder theorists, there
ends and means; applying instrumental theory
are also important disagreements. We address
to just any ends should not be appropriate.
the question of whether or not these divergent
Thus, another form of unification of the two
views can be shaped into a hybrid theory in the
approaches to stakeholder theory becomes ap-
next section.
parent: members of the social science camp
should explicitly ground their instrumental the-
THE PROSPECTS FOR A HYBRID THEORY ories in morally sound principles. Put another
way, it is neither necessary nor desirable for
A Partial Consensus and Theory Unification
social scientists to eschew the normative as-
Since the agreements among stakeholder the- pects of their work; "value-free" social science is
orists involve many issues important to success- no more credible here than it is in other areas of
ful research in the field, there may be some academic inquiry (Weaver & Trevinio, 1994). It
basis for hope that a hybrid stakeholder theory, follows that separating the forms of stakeholder
containing elements of both social science and theory is not appropriate in this case; the narra-
ethics, could emerge. A brief look at some impli- tive accounts adherents clearly have something
cations of the above discussion for the instru- to contribute to the social scientists.
mental and narrative interpretations perspec- It is worth noting that instrumental stake-
tives illustrates this point. holder theorists can explicitly embrace the ad-
dition of normative soundness to their theorizing
without abandoning any of the criteria of "good"
Normative Foundations for Instrumental
theory in the organization sciences; in fact, they
Theory
may even enhance the credibility of their contri-
To begin with, there is no reason that instru- butions. Bacharach defines theory as "a state-
mental theory, like the narrative accounts ap- ment of relations among concepts within a set of
proach, cannot be a class of theories, rather than boundary assumptions and constraints" (1989:
a single theory. By definition, instrumental the- 496). Theory of this type, he argues, must be
ory involves if/then statements. Nothing about falsifiable-logically coherent and operation-
the existence of if A, then B precludes the exis- alizable-and useful-possessing sufficient ex-
tence if C, then D or if E, then F. Indeed, nothing planatory power in terms of scope and compre-
about the existing version of instrumental stake- hensiveness. Other criteria include clarity and
holder theory (Jones, 1995a) makes it impossible parsimony (balanced against scope). Values set
to imitate in terms of general form. The emer- the limits of a theory's applicability; explicitly
gence of other versions of instrumental stake- stated values improve the credibility of any the-
ory development effort, according to Bacharach. likely to lead to marketplace failure. In short, an
Thus, when an instrumental stakeholder theory impractical normative core seriously compro-
is grounded in the values inherent in a morally mises the well-being of those with an interest in
based normative core, it gains a credibility- the firm's success-its stakeholders-and,
enhancing boundary condition (the theory ap- therefore, certainly fails the test of a morally
plies only if certain behavior is adopted), as well sound normative core.2
as moral soundness. Instrumental stakeholder Furthermore, since narrative interpretation
theory without a morally sound normative foun- advocates argue that separating the theory into
dation not only violates the premises of stake- three parts is inappropriate, it follows that they
holder theory but also is incomplete as social should also believe that their theories must be
science theory. both normatively and instrumentally sound.
Were this not the case, they could simply accept
the Donaldson and Preston taxonomy and lay
Narrative Accounts Based in Social Science
claim to the domain of normative theory. How-
"Reality"
ever, it would be oddly paradoxical for a norma-
Since narrative accounts have their intellec- tive stakeholder theorist to advocate a norma-
tual roots in business ethics, the criteria for good tive core that threatened the viability of the firm
theory in ethics ought to apply. Beauchamp and and, thus, the interests of its stakeholders.
Childress define ethical theory as "a framework Therefore, advocates of narrative stakeholder
within which agents can reflect on the accept- accounts should embrace some form of instru-
ability of their actions and can evaluate moral mental theory because they believe in (1) creat-
judgments and moral character" (1994: 44). They ing "good" ethical theory, (2) protecting the in-
list eight criteria for "adequate" ethical theory, terests of corporate stakeholders, and/or
some of which, singly or in combination, have (3) maintaining an integrated focus in stake-
rough analogs in social science theorizing: co- holder theorizing. It follows that they could
herence, explanatory power, clarity, output strengthen their work substantially by demon-
power, completeness, comprehensiveness, sim- strating that their theories not only have morally
plicity, and justificatory power. Justificatory sound normative cores but also that they plau-
power, the ability of a theory to justify-not sim- sibly lead to satisfactory outcomes for both in-
ply describe-moral precepts, is mandatory ac- dividuals and the firms that employ them. In-
cording to Beauchamp and Childress. Of most deed, an awareness of the importance of firm
importance for our purposes is their claim that survival can be found, in undeveloped form, in
ethical theory ought to be practicable; theory Evan and Freeman (1983), Freeman and Gilbert
based on utopian ideals or unfeasible expecta- (1988), Wicks et al. (1994), and Wicks and Free-
tions is of little use. Here, they echo Kant (1949), man (1998). If the goal of good stakeholder nar-
whose view that "ought implies can" reflects a rative accounts is to help human beings lead
concern for practicability, and Weaver and morally meaningful lives in the context of via-
Trevifio, who express concern that "self-con- ble, productive organizations, there is no point
tained normative inquiry may become too ab- in creating accounts that (1) do not allow people
stract, or too idealistic, to be of any practical to survive in such organizations or (2) hinder the
value" (1994: 132). organization's quest to perform an essential
Even if, as some have argued, practicability is mission-profitably producing goods or services
not a critical component of ethical theory in gen- in a market economy. Narrative accounts with-
eral, it is vital in the context of stakeholder the- out some form of instrumental argument as to
ory. An essential feature of practicability in their practicability are incomplete as stake-
stakeholder theory is that the firm remain via- holder theory.
ble, which usually means profitable. Managers A persuasive narrative account, then, would
who attempt to implement an impractical nor- have a strong normative core, would be based in
mative core will fail in their basic moral obliga-
tion to protect (and advance) the "stakes" of
those who make the firm a going concern. In- 2 We acknowledge that there may be cases in which
stakeholders have an interest in a particular firm ceasing to
deed, prospective stakeholders will be reluctant
exist, but we suspect that such cases are likely to be rela-
to take stakes in firms whose core values are tively rare.
credible contexts (not in utopian organizations), sented here precludes the development of either
and would have a theoretically and (perhaps) em- other unified theories or stakeholder theory that
pirically sound means-ends chain. That is, the in- is exclusively normative, instrumental, or de-
strumental path between the behavior called for scriptive.
by the normative imperative must credibly lead to The term convergent stakeholder theory ap-
desirable outcomes: Of course, the nature of argu- plies to a class of theories, each representative
ments deemed appropriate to demonstrate the of which would have the following characteris-
practicability of the theory could (and probably tics.
would) be a matter of considerable debate; the
theoretical unification we propose does not re- 1. The following boundary conditions are met:
* the firm is publicly held and operates in a
quire agreement on a single research paradigm.
competitive market economy,
The advocates of narrative interpretation are un- . important corporate decisions are made
likely to agree with the social scientists on some by professional managers, and
fundamental issues, such as ontological assump- * the behavioral contingency (the norma-
tive core) is adopted-the value of the
tions (the nature of organizational phenomena),
supporting instrumental theory is contin-
basic epistemology (the nature of knowledge gent on the prescribed behavior.
about organizational phenomena), and methodol- 2. It does not depend on any specific behav-
ogy (the nature of appropriate means of studying ioral assumptions; it assumes only that
organizational phenomena; Gioia & Pitre, 1990; . human behavior is both varied (e.g., self-
Morgan & Smircich, 1980). interested, trusting, and cooperative) and
variable (e.g., sometimes self-interested,
As McClosky argues in The Rhetoric of Eco-
sometimes "other regarding") and that
nomics (1985), even the "hardest" of the social * human behavior is malleable-it often
sciences employs rhetorical techniques that are depends on context and circumstances.
not really as logically or mathematically rigor- (Organizational structures and cultures
ous as their advocates pretend. Persuasion is affect the way that people behave; we
can, at least partially, enact the environ-
the key, he argues, and effective persuasion
ments in which we operate.)
comes in many forms. The principal virtue of 3. It is a theory of relationships (a broader
"scientific" evidence in stakeholder theory may term than contracts or transactions).
be that, given the methodological orientation of 4. It is simultaneously normative and instru-
most management scholars and the "hard evi- mental, offering both normative standards
of behavior and arguments that adherence
dence" orientation of many managers, it is likely
to those standards will lead to outcomes
to be persuasive to more relevant people than that are both normatively and practically
other forms of evidence. The addition of instru- acceptable.
mental theory and/or evidence to narrative ac- 5. Its normative foundation ("core") is explic-
counts would at least mitigate the charge (made itly and unabashedly moral and has to be
explicitly defended in moral terms; instru-
by social scientists) that such accounts consti-
mental means are not either (a) applied to
tute philosophical fantasies. It would also re- immoral behavioral standards or (b) used to
duce the number of such accounts, not to the pursue immoral ends.
limits of the imaginations of those who create 6. Its instrumental means-ends chain is per-
them, but to those that can be judged practical suasively argued and demonstrates the
practicality of the behavior called for in the
in some theoretically or empirically persuasive
normative core.
sense. Thus, the addition of social science evi- 7. It is managerial in focus, instructing man-
dence can improve narrative accounts by agers with respect to
strengthening the case for their practicability. . the way in which relationships with cor-
porate stakeholders should be structured
(the means to corporate ends),
THE STRUCTURE OF CONVERGENT . the moral foundation for structuring these
STAKEHOLDER THEORY relationships in the specified way,
* the outcomes expected from structuring
What might a useful hybrid stakeholder the- relationships in the specified way (corpo-
ory look like? Our best estimate of a productive rate ends) and why these outcomes are
expected to obtain (means-ends chain),
unification is convergent stakeholder theory, de-
and
scribed in this section and illustrated by the . if the specified ends are unconventional,
example found in the Appendix. Nothing pre- the moral defense of those ends.
The central question addressed by convergent quires that both normative and empirical theories
stakeholder theory is: What kinds of stakeholder be incorporated into the explanatory framework.
relationships are both morally sound and prac- Finally, theoretical unity implies that distinguish-
ticable? The theory has a normative component, ing between the empirical and normative ele-
in that both the means employed and ends ments of the theory is "methodologically and
sought must be morally sound. It also has an metatheoretically untenable" (1994: 137). We have
instrumental component, in that the means-ends chosen the term convergent because, as we argue
chain must be logically compelling, theoreti- below, our theory exceeds the standards of sym-
cally coherent, and, where possible, empirically biosis and meets those of integration (theoretical
viable. To be sure, the nature of the evidence reciprocity) in some cases. Conceptual importa-
advanced in defense of each theory's practica- tion is not described in enough detail to permit a
bility will vary from theorist to theorist, and cer- meaningful analysis.
tain forms of evidence will be more compelling To begin with, if integration means that the
to some groups than to others. There is nothing same methods must be employed in the defense
in this formulation of stakeholder theory that of the normative core and the supporting instru-
settles ongoing debates over ontology, episte- mental theory, full integration of normative and
mology, and methodology. Since no theory meet- empirical theories is highly improbable. Ethical
ing these criteria for convergent stakeholder arguments and instrumental arguments (partic-
theory has yet emerged, we offer an abbreviated ularly those based in social science) have im-
example in the Appendix. portant underlying differences that preclude
wholesale inferences from one to the other
(Wicks & Freeman, 1998). We proceed from the
WHAT IS CONVERGENT STAKEHOLDER
assumption that the relevant issue is whether or
THEORY?
not scholars advancing convergent stakeholder
Up to this point, we have used the terms unifi- theory can agree on sets of methods that include
cation and hybrid somewhat casually, assuming ethical and instrumental elements.
that if two theories are merged in some way, they Convergent stakeholder theory clearly is con-
are unified or constitute a hybrid theory. We now gruent with the following representative state-
discuss what we mean by convergent stakeholder ment describing symbiosis.3
theory. Weaver and Trevifio (1994), in an article
Deliberate attention to descriptive, empirical the-
examining possible relationships between the ory can prevent normative researchers from pro-
normative and empirical branches of business posing programs of moral improvement which ...
ethics, offer three distinct possibilities: parallel- in practice are unfeasible or even likely to under-
ism, symbiosis, and integration (in order of in- mine moral behavior. Attention to normative the-
ory, in turn, aids empiricists in being self-
creasing interaction). Parallel development im-
conscious about the purpose, character, and
plies that the two approaches (normative and results of their work (Weaver & Trevinio, 1994: 133).
empirical) share little but an interest in the same
kinds of business behavior. Symbiosis means that Furthermore, it substantially exceeds the crite-
the two modes of inquiry take insights from each rion for symbiosis that states that there is a
other but remain "essentially distinct in their the- surface-level practical relationship in which nor-
oretical principles, methodologies, and metatheo- mative and/or empirical business ethics rely on
retical assumptions" (Weaver & Trevifio, 1994:133). each other for guidance in agenda setting or ap-
Integration (the authors also use the term hybrid- plying the results of their conceptually and meth-
odologically distinct forms of inquiry. For exam-
ization) implies that the two theories can be seen
ple, symbiosis would occur if empiricists were to
as elements of a single theory and involves a focus ... on insider trading or leveraged buyouts
conscious "commingling of the cores of the two in response to moralists' condemnation of such
disciplines" (1994: 136). behavior (Weaver & Trevifno, 1994: 129).
Integration/hybridization itself has three forms:
conceptual importation, theoretical reciprocity,
and theoretical unity (in order of increasing inten-
3In our assessment of the fit of our theory into the Weaver
sity). Conceptual importation involves only the in-
and Trevifio (1994) typology, we examined nearly 30 descrip-
voking of concepts of one theory in the theorizing tive statements. The statements offered in the text are rep-
of the other. Theoretical reciprocity, however, re- resentative of the total inventory of statements examined.
In addition, convergent stakeholder theory mately, we agree with Weaver and Trevinio's
meets the following criteria for theoretical reci- view that "judgment as to the feasibility of full-
procity. There is "an intentional interdepen- scale integration is best left until after serious
dence of normative and empirical theories," and efforts at achieving it take place" (1994: 141).
"the framework's success in providing either an This article presents a candidate for evaluation
empirical description or normative evaluation of as integrated theory.5
some phenomenon depends, respectively, on its
normative or empirical adequacy" (Weaver &
CONCLUSION
Trevinio, 1994: 136).
However, the criterion for theoretical reciproc- In this article we have presented a new form of
ity that says "potentially involving alterations stakeholder theory-one that joins two divergent
in or unifications of the substantive theory, strains currently emerging in the stakeholder lit-
metatheoretical assumptions, or methodology of erature. Convergent stakeholder theory, a class of
each approach" (Weaver & Treviiio, 1994: 130) theories with specific characteristics, is both nor-
may not be met in all cases. (The interdepen- matively sound and practically viable; each ver-
dence of the elements of a convergent stake- sion must have a well-defended normative core
holder theory may require one element to be and supporting instrumental arguments to dem-
altered. Metatheoretical assumptions and meth- onstrate its practicability.
odologies may or may not be altered.4) Ulti-
5 This integration/symbiosis appears to be successful in

The fulfillment of all of the criteria for theoretical reci- spite of Donaldson's (1994) argument that normative and
procity of the normative and empirical elements of conver- empirical elements of ethics can be linked only in the most
gent stakeholder theory may depend on the type of theory superficial manner. His concern is that allowing the empir-
and/or evidence offered in support of its instrumental sound- ical to inform the normative would mean falling prey to the
ness. If the theorist considers social science "rhetoric," with "naturalistic fallacy" (Moore, 1903). Here, the distinction,
the ontological, epistemological, and methodological as- which Donaldson does not make in this article (see 1994: 158),
sumptions of the "functionalist" paradigm (Burrell & Mor- between descriptive and instrumental theory-both of which
gan, 1979; Gioia & Pitre, 1990; Morgan & Smircich, 1980), to be are empirical-becomes important. His main point is that
highly persuasive, he or she will regard a form of instrumen- the way that human beings actually behave (descriptive)
tal theory from which hypotheses can be derived (and later should not influence our judgments as to how they should
tested) as the appropriate form of support for the chosen behave (normative).
normative core. He or she will then have developed instru- Convergent stakeholder theory, however, involves apply-
mental theory only in support of a morally tenable norma- ing instrumental theory ("what happens if?") to normative
tive core and, thus, will have added the metatheoretical cores to see if they result in personally and organizationally
assumptions and methods of ethics to the methods of social viable outcomes; instrumental theory helps evaluate the
science. This form of convergent stakeholder theory seems to practicability of the behavioral contingency (normative core)
be an almost archetypal example of theoretical reciprocity. of the convergent theory. The difference is subtle but impor-
Something less than full theoretical reciprocity and, tant. One can concede that it is inappropriate to derive an
therefore, closer to symbiosis will occur in cases in which "ought" from an "is," yet also conclude that we should not
the theorist, while perhaps accepting the theoretical princi- ask human beings to do what they cannot reasonably do. In
ples of convergent stakeholder theory, does not accept the parallel language, it is inappropriate to derive an "ought"
ontological, epistemological, and methodological research from a "cannot."
assumptions of functionalist social science. In these cases If Donaldson's argument is intended to preclude this type
the theorist has accepted the necessity of providing a coher- of link between empirical and normative theory, it may be
ent means-ends argument, as we have argued that he or she that he does not believe that practicability is an appropriate
should, but is inclined to endorse a much broader answer to criterion for good ethical theory. If poor outcomes in a stake-
the question of what counts as evidence. The theorist has holder context result from the behavior called for in the
not, therefore, altered his or her metatheoretical assump- normative core, we should conclude that the normative core
tions or methodology. Consequently, the theorist undoubt- in question is a poor foundation for stakeholder theory-not
edly will offer a much broader range of types of instrumental necessarily that the normative standard is, by itself, morally
support for his or her convergent theory. However, normative unsound. Our position is compatible with the view of not
cores advanced with no instrumental argument do not fit our only Weaver and Trevifio (1994), but also Beauchamp and
definition of convergent stakeholder theory; they are simply Childress (1994) and Kant (1949), as discussed in the text. We
normative stakeholder theory with unexamined practicabil- have also shown that practicability has a moral foundation
ity. Of course, the persuasiveness of each approach to ad- because stakeholders, for whom normative prescriptions
herents of the other approach remains an open question. We presumably are formulated, usually have a fundamental
cannot resolve years of debate on ontology, epistemology, interest in the survival of the firm. A persuasive case for
and methodology in this article. "can" becomes an "ought" for stakeholder theorists.
In evaluating any new theory, organization Normative Core: Relationships characterized by

scholars are concemed about its conceptual co- mutual trust and cooperation are morally desir-
herence-its "fit" into the body of existing theory able.
in a field or related fields (Bacharach, 1989). A new
Supporting Instrumental Theory: Firms whose
theory can be connective-bridging the gap be-
managers establish and maintain mutually
tween existing theories- or transformational-
trusting and cooperative relationships with
causing existing theories to be seen in new ways.
their stakeholders will achieve competitive ad-
Theory with enough transformational capacity
vantage over those whose managers do not.
can serve as "enlightenment," with the intent of
"clearing away conventional notions to make Ethical Defense of the Normative Core: Trust
room for artful and interesting insights" (DiMag- and Cooperation Are Morally Good. In a com-
gio, 1995: 391). Rather than addressing the connec- prehensive analysis of trust, Hosmer develops
tivity issue by comparing and contrasting our the- the following definition:
ory with other theories of organization, an exercise
Trust is the expectation by one person, group, or
unlikely to shed much light on either, we argue firm of ethically justifiable behavior-that is,
that explicitly and unabashedly moral convergent morally correct decisions and actions based on
stakeholder theory is a new way of theorizing ethical principles of analysis-on the part of the
other person, group, or firm in a joint endeavor or
about organizations and is, therefore, potentially
economic exchange (1995: 399).
transformational-not just for scholars but for
managers as well. Managers in search of mis- (Note: We apply the term mutual trust to rela-
sions that are both moral and practical may be tionships in which both [or all] parties are both
inspired to look at their organizations differently. trusting [as described above] and trustworthy
Here, we endorse Weick's (1979) notion of enacted [deserving of trust as described above].)
environments by arguing that properly conceived Moral philosophers from three different per-
convergent stakeholder theory can show us how spectives- deontological, virtue based, and
corporate managers can behave morally in a utilitarian-have provided arguments that trust
stakeholder context, without endangering either is a morally desirable characteristic of relation-
the viability of the firm or their relationship with it.ships. Kant (1949), a deontologist, saw trust as an
In shorthand form, managers can create moral expression of moral achievement-having and
business environments and make them work. acting on good will-and as an extension of his
Development of convergent stakeholder theory, maxim to respect the inherent worth of other
which involves both ethical and instrumental ar- human beings. More specifically, he advocated
gumentation, will be challenging but not impossi- treating others as ends rather than only as
ble. Such development may prove necessary if we means to one's own ends. Virtue theorists, such
as a society desire a moral and practical organi- as Aristotle, see trust as an expression of human
zational response to the spread of intensely com- excellence displayed in both individual rela-
petitive global markets. Convergent stakeholder tionships and in the larger community-that is,
theory, in its most effective forms, could show they see trust as a virtue (Hosmer, 1995). Utilitar-
managers how to enact environments appropriate ians in general, and rule utilitarians in particu-
to this task. The challenge to stakeholder theo- lar, regard trust as morally good because it fa-
rists-advocates of social science and narrative cilitates voluntary cooperation and lowers the
interpretation alike-could not be more clear. costs of group activity, making social exchange
more efficient (Beauchamp & Childress, 1994).
Economists, arguing from a utilitarian perspec-
tive, have long touted the economic value of
APPENDIX
trust as a public good (North, 1981).
TRUST AND COOPERATION IN CORPORATE
Recently, Fukuyama (1995) discussed trust as
STAKEHOLDER RELATIONS: A CONVERGENT
a "social good" that is particularly valuable in
STAKEHOLDER THEORY
emerging economies and argued that differen-
Managerial Maxim: Managers should strive to tial levels of trust may be critical factors in dif-
create and maintain mutually trusting and co- ferential development rates. Baier (1994), em-
operative relationships with corporate stake- ploying a perspective that does not fit neatly
holders. into any of the above-mentioned moral tradi-
tions, links trust to emotional states that reveal cally" moral be distinguished from the intrinsi-
its underlying goodness. Trusting and being cally moral? According to Frank (1988), individ-
trusted tend to make people feel more secure uals convey honest intentions through "sincere
and better accepted and may enhance self- manner" and reputation. For firms, reputation
esteem. Distrust, however, can induce feelings will be the more important means of conveying
of insecurity, exclusion, and low self-esteem. In intrinsic honesty. Firms with reputations for
sum, perspectives from a broad range of West- trustworthy behavior will be sought after as
ern moral thought endorse the fundamental partners in relationships that require trust and,
moral goodness of trust. therefore, will gain competitive advantage.
Instrumental Arguments in Support of the Theo-

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Thomas M. Jones is the Connelly Visiting Scholar at Georgetown University and a

professor of management and organization at the University of Washington. His Ph.D.
is from the University of California at Berkeley. His research interests include stake-
holder theory, ethical decision-making models, corporate social performance, corpo-
rate governance, and simulation models.
Andrew C. Wicks is an assistant professor of business ethics in the Management and

Organization Department at the University of Washington Graduate Business School.
He received his Ph.D. in religious ethics from the University of Virginia. His research
interests in business ethics include stakeholder theory, managed care, trust, total
quality management, and employee stock ownership plans (ESOPs).

Jones, T. M., Wicks, A. C. 1999.

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Convergent Stakeholder Theory

Author(s): Thomas M. Jones and Andrew C. Wicks

CONVERGENT STAKEHOLDER THEORY

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5 This integration/symbiosis appears to be successful in

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Instrumental Arguments in Support of the Theo-

Thomas M. Jones is the Connelly Visiting Scholar at Georgetown University and a

Andrew C. Wicks is an assistant professor of business ethics in the Management and

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