Stakeholders
...interested managers allowing them to pursue their own interests at the expense of society and the firm’s financial claimants. It allows managers and directors to invest in their favourite projects that destroy firm-value whatever they are without having to justify the value destruction. And this can be true even though managers may not recognise consciously that adopting stakeholder theory leaves them unaccountable. By expanding the power of managers in this unproductive way, stakeholder theory therefore increases agency costs in the economic system. Viewed in this way it is not surprising that many managers like it. By gutting the foundations on which the firm’s internal control system could constrain managerial behaviour, stakeholder theory gives unfettered power to managers to do almost whatever they want, subject only to constrains by the financial markets, the market for control, and the product markets. Thus, it is not surprising that we find stakeholder theory used to argue for governmental restrictions on financial markets and the market for corporate control. Theses markets are driven by value maximisation and will limit damage that can be done by managers who adopt stakeholder theory. Current pressures for restrictions on global trade as well as environmental campaign illustrate use of the stakeholder arguments to restrict product-market competition as well. Implications for the power of special interests In addition, stakeholder theory plays into the hands of special interests who wish to use the resources of firms for their own ends. With the widespread failure of centrally planned socialists and communist economies, those who wish to use non-market forces to reallocate wealth find great solace in the playing field that stakeholder theory opens to them. Stakeholder theory gives them the appearance of legitimate political access to the sources of decision making power in organisations, and it deprives those organisations of a principled basis for rejecting those claims. The result is to undetermined the foundations that have enabled markets and capitalism to generate wealth and high standards of living worldwide. If widely adopted, stakeholder theory will reduce welfare even as its advocates claim to increase it just as in the failed communist and socialist experiments of the last century. Stakeholder theorists will often have the active support of managers who wish to throw off the constrains on their power provided by the value-seeking criterion and its enforcement by capital markets, the market for corporate control and product markets. Example of Stakeholders concerns in research studies A “stakeholder” in a worker health study is an individual or a group with an interest or “stake” in the conduct or outcome of the study. When workers participate in research studies, the list of stakeholders is long and includes, employers, public and community, multiple levels of government, workers, etc. Shared interests and concerns applicable to all stakeholders are to ensure: The protection of the rights and welfare of worker subjects. Early notification all stakeholders, particularly the worker population of studies. Early involvement of all stakeholders, including the worker population, in the design and development of the study. All stakeholders understanding the objectives and proposed methods of the study. All stakeholders understand and comply with human-subject study ethics and regulations. Shared responsibilities applicable to all stakeholders are: To ensure that the study has scientific merit and or is subject to rigorous peer review. To be informed about the research topic and procedures. Work to achieve consensus with other stakeholders when conflict are apparent. To provide notification and project information to other stakeholders. To participate actively in the development, design, and conduct of the study. To fulfil these responsibilities throughout the life of the study. Workers Workers have the most gain and lose from worker studies. The interests and concerns should take precedence over the interests and concerns of other stakeholders. Interests and concerns applicable to workers and worker subjects include: The freedom from pressure to participate, decline or withdraw whether real or perceived. Perceived or actual threats to job security, future employability, pension or medical benefits. Privacy and confidentiality of personal of records, data. The possible perception of being exploited when they are the subject of an excessive number of research studies. The extent of involvement in the program. The impact of time away from job or lost time. Possibility of injury or pain. Potential impact on family. Responsibilities of workers and worker-subjects include that they: Read pertinent study information. Read and understand the informed consent documents and study materials. Know and understand one’s rights as a research subject. Confirm that they understand the subject matter with study experts. Employers Employers are often concerned if not threatened by the possible cost and economic impact to their business due to the publication or dissemination of worker health study results. However, most employers recognise that early detection of identifiable health problems typically costs less over longer periods of time. The employer’s attitude and cooperation study and successful study outcomes. Interests and concerns applicable to employers include: Early notification and continued involvement in study design and conduct. Protection of proprietary or sensitive information. Costs, including start up, lost productivity, insurance and copying of records. Protecting each employee’s privacy. Maintaining productivity and profit. Potential liabilities such as: study findings that may be detrimental to the company; obligations or worker compensation that might result from the study findings. Protecting employees and their well being as well as maintaining a healthy workforce. Responsibilities of employers include that they: Assure that the worker-study process is thoroughly understood by management. Require that the study undergo scientific peer review. Participate in the development and design of the study. Assess the risks and benefits to both employees and employers. Assure that the worker community has full knowledge of the research study. Public and community The community has a strong interest in protecting both interests of the workers of the community and the viability and success of the employer. If public money is used in the study, then the use of tax revenues may also be an issue. Local press and news agencies can be important allies early in the study process by raising issues and information the community of the purpose, risks and benefits of a successful worker study. Interests and concerns applicable to the public and community include the: Protection of workers as members of the community Appropriate use of taxpayer dollars. Loss of employment and tax revenue availability. Responsibilities of the public and community include that they: Be knowledgeable about issues, concerns and appropriate regulations relating to the study. Be involved. Government One or more government agencies may hold regulatory and enforcement authority over the conduct of studies involving workers. Often, government agencies are also the source of all or part of the funding for worker studies and may be in conflict with privacy and confidentiality expectations. Interests and concerns applicable to government agencies include that the: Human subject research is conducted ethically and in accordance with applicable regulations. Study is conducted in accordance with the laws applicable to workers under their jurisdiction. Responsibilities of gover...