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62 Mapping the Field

Table 3.1 Contractual and community stakeholders
Contractual stakeholders Community stakeholders

Customers Consumers
Employees Regulators
Distributors Government
Suppliers Media
Shareholders Local communities
Lenders Pressure groups

competitors.And lastly influencer stakes are held by those who do not have either an
ownership or economic interest in the actions of the organization,but who have inter-
ests as consumer advocates,environmental groups,trade organizations and government
agencies. By considering these groups of stakes, Freeman specified the nature of stakes
in terms of the interest of various groups in the organization – whether this interest
was primarily economic or moral in nature – and whether this interest was bound in
some form through a contract or (moral) obligation.
One way of looking at stakes is thus whether the interest of a person or group in
an organization is primarily economic or moral in nature. Clarkson suggests in this
respect to think of primary and secondary groups of stakeholders, with primary
groups being those groups that are important for financial transactions and necessary
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for an organization to survive. In short, in Clarkson’s view, a primary stakeholder
group is one without whose continuing participation the corporation cannot survive
as a going concern. Secondary stakeholder groups are defined as those which gener-
ally influence or affect, or are influenced or affected by, the corporation, but are not
engaged in financial transactions with the corporation and are not essential for its
survival in strict economic terms. Media and a wide range of special interest groups
fall within the secondary group of stakeholders.They do, however, have a moral or
normative interest in the organization and have the capacity to mobilize public opin-
ion in favour of, or in opposition to, a corporation’s performance, as demonstrated
in the cases of the recall of Tylenol by Johnson & Johnson (favourable) and the Exxon
Valdez oil spill (unfavourable).
A second way of viewing stakes is to consider whether or not stakeholder ties with
an organization are established through some form of contract or formal agreement.
Charkham talked about two broad classes of stakeholders in this respect: contractual
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and community stakeholders. Contractual stakeholders are those groups which have
some form of legal relationship with the firm. Community stakeholders involve those
groups whose relationship with the firm is more diffuse but nonetheless real in terms
of its impact. Put differently, while community stakeholders are not contractually
bound to an organization,such groups as the government,regulatory agencies,trade asso-
ciations, professional societies and the media are important in providing the authority
for an organization to function, setting the general rules and regulations by which
activities are carried out, and monitoring and publicly evaluating the conduct of busi-
ness operations. Contractual groups, including customers, employees and suppliers, are
formally and more directly tied to an organization, and the nature of their interest is
often economic in providing or extracting resources from the firm (Table 3.1).