Ed Freeman

Stakeholder and Responsible Leadership – Ed Freeman

In this interview, Ed Freeman, the founder of the stakeholder theory, provides valuable insight on how to overcome stereotypes about “academics” and “practitioners”, to create positive social impact. He also discuss the  essentially of communication and notes that one of the reasons why this conference series has been so successful is due to the informal time that academics and practitioners spend together.

(1) Ed, you are known as the founding father of the stakeholder theory. What motivated you to postulate this theory?

My understanding of what has been done may be a bit different from others.  I was simply trying to make sense of what “business” really was.  I had recently gotten my PhD in Philosophy and had no experience with business, and I found myself with a Post-doc at Wharton.  It seemed to me like every business I saw was trying to create value for customers, suppliers, employees, communities, and financiers.  I took this as obvious and common sense, not a “theory” at all.  I’ve tried to pursue this understanding of business for the last 40 years.  I get way too much credit for “stakeholder theory”.

(2) The topic of The 8th International Conference on Sustainability and Responsibility is, “Responsible Leadership in Times of Transformation”. What role does the stakeholder theory play with respect to responsible leadership?

Once again I have to confess being naieve.  I didn’t know that business schools and business theorists separated “business” from “ethics” (and responsibility).  I was trying to give a useful answer to the questions of (1) How can businesses thrive in times of instability and uncertainty? (2) How do we address the issue of the ethics of capitalism? and, (3) What should we be teaching in business schools?  Business and responsibility have always seemed intimately connected to me.  I originally thought that positivism was long dead having been killed at least by Wittgenstein and the pragmatist philosophers of the 1950s.  I was surprised to find it alive and thriving (especially today) at business schools all over the world.

(3) In your opinion, what are some of the pressing challenges facing stakeholders in times of transformation (e.g. considering digitalization or increased fragmentation of stakeholders)?

One of the biggest challenges is keeping up with some incredible technological advances, and since that is really technically impossible, it is imperative to be able to trust others.  The role of ethics and integrity is more important than ever.

(4) At the conference we aim to connect academics and practitioners. What do you think are the most significant challenges and opportunities that arise from a such format?

The biggest issue is how to really listen to each other, and establish some trust.  Academics aren’t the best listeners, and practitioners don’t always have the most open minds.  The challenges of communication are fairly substantial.  One of the highlights of this conference in the past has been the informal time to spend with both other academics and practitioners.  All seem to want to have better relationships and more communication.

(5) How can we use this conference to create or foster societal impact?

Perhaps, out of the communication will come some new ideas, embodied in some new projects that can make a difference.  Getting rid of old stereotypes about “academics” and “practitioners” can really help here.

(6) What do you personally hope for this conference to accomplish?

Conferences can inspire people to do important work.  I see that as part of my role as an academic:  to inspire colleagues, students, and practitioners to figure out how to create value for their stakeholders, and make the world a better place for our children.

Thank you for your time!

About the Author

R. Edward Freeman is University Professor and Elis and Signe Olsson Professor of Business Administration; Senior Fellow of the Olsson Center for Applied Ethics; Academic Director of the Business Roundtable Institute for Corporate Ethics; and Co-Academic Director of the Institute for Business in Society. He is also Adjunct Professor of Stakeholder Management at the Copenhagen Business School, and Adjunct Professor at Monash University (Melbourne). Mr. Freeman taught previously at the University of Minnesota, and The Wharton School, University of Pennsylvania. 

Freeman’s latest book, Business: The New Story, with Bidhan Parmar and Kirsten Martin will be published by Columbia University Press in 2019,  A previous book, Stakeholder Theory: The State of the Art, was published by Cambridge University Press in 2010 (co-authored with J. Harrison, A. Wicks, B.Parmar, and S. de Colle.) He is the author or editor of over twenty volumes and one hundred articles in the areas of stakeholder management, business strategy and business ethics. Freeman is perhaps best known for his award winning book: Strategic Management: A Stakeholder Approach, published in 1984.

Freeman has a Ph.D. in Philosophy from Washington University, and a B.A. in Mathematics and Philosophy from Duke University. He was recently awarded four honorary doctorates in economics and management (DHC) from Comillas University in Madrid, from Radboud University in Nijmegen, the Hanken School of Economics in Helsinki and Sherbrooke University in Canada for his work on stakeholder theory and business ethics. Mr. Freeman is a lifelong student of philosophy, martial arts, and the blues. He is a co-principal in Red Goat Records, LLC found at redgoatrecords.com. For more information, go to www.REdwardfreeman.com

René Schmidpeter

Responsible Leadership in Times of Transformation

The world is rapidly changing. Digital transformation, sustainable management and industry 4.0 are already the reality. This not only affects our workplaces and businesses, but also academia and education. Instead of linear conventional thinking, managers need innovative skills, such as cooperation and social competences. The whole world has access to the internet’s unlimited knowledge base and an increasing number of people have the ability and means to access it every day. In order to properly utilize this continuously growing and changing knowledge base, leaders have to develop new skills and enhance personal abilities. New skills can only be developed in an open and free setting without the limitations of ideologies and old mindsets.

Organizations, as well as their leaders and employees benefit from these recent developments. On the one hand, people become part of global information and knowledge network caused by digitalization, on the other hand personal excellence and creativity becomes more valuable in the value creation process. Intuitive knowledge, personal values, as well as a clear orientation towards the future are gaining importance and seen as necessary mindsets to foster innovation and drive sustainable development.

Currently Academia is going through a transformation itself. We need to develop new content (e.g. sustainable management), new methods (innovation and creativity, unique experiences, free thinking), and governance structures (open networks, co-creation and dynamic learning organizations). The question remains: How can we achieve all this? How can we develop innovative leadership approaches and new education systems at the same time? How can we re-organize academia and management, so that we can create value from the under-utilized ecological, social and entrepreneurial potential, which lies within all of us and our organizations? What does a co-creation process of knowledge and responsible leadership look like? How can we have a positive impact on current transformation processes?

Management and Academia will change fundamentally within the next decade. It is not going to be enough to only provide the same opportunities for the next generations. Instead, we need to INCREASE opportunities for current and future generations NOW. This new vision for business and universities will empower even more people, especially managers, to change out-dated structures and organizations, and pioneer responsible leadership that will create more opportunities for all of us. If one examines the changes from this perspective, the current transformation is the biggest opportunity of our lifetime! Academic conferences like the PRME and the Humboldt conference represent a tremendous opportunity to build new collaborations across disciplines, between business and academia, as well as between different cultures and continents, so that we can achieve these new goals together. Times of transformation are always different from previous times, that’s why every person and their unique competencies and skills count! That’s why I hope to see you all in Cologne from 12th till 16th in November 2018.

About the Author

Prof. Dr. René Schmidpeter holds the Dr. Juergen Meyer Endowed Chair of International Business Ethics and Corporate Social Responsibility at Cologne Business School (CBS), Germany. He is also a professor at the Nanjing University of Finance and Economics and Adjunct Professor at Murdoch University in Perth, Australia. He is a series editor for Springer’s CSR, Sustainability, Ethics and Governance books, a section editor of the Encyclopedia of Corporate Social Responsibility (ECSR) and an editor of the Dictionary of Corporate Social Responsibility (DCSR) as well as Editor-in Chief of the International Journal of CSR (Springer).