Mich: Can we see firms and their stakeholders as human again, and does it make a difference?

Katinka Quintelier

In the 1936 movie Modern Times, Charlie Chaplin criticized business activity as a purely mechanical quest for profit, dehumanizing to employees, and leaving no room for moral considerations. For instance, the main character is being force-fed by a machine, and this raises no moral considerations, only practical considerations, from the by-standing management team. In order to overcome this undesirable state of affairs, scholars in normative stakeholder theory advocate that business should not prioritize profit, but should aim to create value for all stakeholders – those who are affected by, or can affect the firm in its pursuit of its goals (Freeman 1984). This can enable people to see business as a human institution, and it can raise moral considerations about business activity (Newkirk and Freeman 2008). In other words, machine-feeding employees would raise moral considerations. This solution is intuitively appealing, but can it really work? In this project, I conducted a series of experiments to investigate if stakeholder-oriented firms would elicit humanization and moralization. I find that stakeholder-oriented firms clearly elicit humanization, but not moralization.