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The New Stakeholder Theory on Organizational Purpose

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  • Anita M. McGahan

    (University of Toronto, Toronto, Ontario M5S, Canada)

Abstract

The new stakeholder theory (NST) grapples with two canonical questions: Which stakeholders are enfranchised in organizations? How is the value created through stakeholder collaboration distributed and experienced by stakeholders? This paper first describes how the NST builds on original stakeholder theory to ask these two specific questions. The defining features of the NST are (i) a broad range of dependent variables, (ii) descriptiveness, (iii) formalized analysis, (iv) boundaries on stakeholder enfranchisement, and (v) analytic links to other established theories. The paper then assesses the assumptions and implications of this theory for understanding organizational purpose. A primary idea is that the NST conceptualizes purpose as originating in the goals, needs, and interests of stakeholders as complex, nuanced actors. Under the NST, the organization is conceived of as a tool—a functionalized construction—through which enfranchised stakeholders pursue a shared purpose that leads to experiences of stakeholder value in terms that are defined by the relevant stakeholders themselves. The survival and profitability of an organization depends on its effectiveness and efficiency as a tool for accomplishing mutual stakeholder aims, which are what define organizational purpose.

Suggested Citation

  • Anita M. McGahan, 2023. "The New Stakeholder Theory on Organizational Purpose," Strategy Science, INFORMS, vol. 8(2), pages 245-255, June.
    • Handle: RePEc:inm:orstsc:v:8:y:2023:i:2:p:245-255
    DOI: 10.1287/stsc.2023.0184
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    Cited by:

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    2. Witold J. Henisz, 2023. "The Value of Organizational Purpose," Strategy Science, INFORMS, vol. 8(2), pages 159-169, June.
    3. Michele Fioretti & Victor Saint-Jean & Simon C. Smith, 2024. "NGO Activism: Exposure vs. Influence," Papers 2411.06875, arXiv.org, revised Jan 2026.
    4. Sarah Kaplan, 2023. "The Promises and Perils of Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 288-301, June.
    5. Daniel Albert & John Eklund, 2026. "Margin or Mission? Understanding the Relationship Between Multilevel Functional Subgroups and Pricing," Organization Science, INFORMS, vol. 37(1), pages 323-352, January.
    6. Jay B. Barney & Ilze Kivleniece & Anita M. McGahan, 2025. "Theories of firms and the emergence of multinational enterprises: the organizational and managerial implications of solving transactional problems versus creating exchange value," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 56(1), pages 23-32, February.
    7. William Ocasio & Matthew Kraatz & David Chandler, 2023. "Making Sense of Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 123-138, June.
    8. Lifen Ren & Sabrina Mohd Rashid & Normahfuzah Ahmad, 2026. "Destination Brand Communication in the Digital Age: The Case of Traditional Villages in Jinxing, China," Studies in Media and Communication, Redfame publishing, vol. 14(1), pages 112-121, March.
    9. Juan (“John”) Almandoz, 2023. "Inside-out and Outside-in Perspectives on Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 139-148, June.
    10. Anita M. McGahan & Leandro S. Pongeluppe, 2023. "There Is No Planet B: Aligning Stakeholder Interests to Preserve the Amazon Rainforest," Management Science, INFORMS, vol. 69(12), pages 7860-7881, December.
    11. Wang, Stephanie Lu & Sun, Jinyun & Schreck, Sydnie, 2025. "Turning accidents into advantages: An actionable framework for accidental corporate social responsibility," Business Horizons, Elsevier, vol. 68(6), pages 777-791.

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