700 Families to Feed: The Challenge of Corporate Citizenship

Tara J. Radin

No 534, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: When Howard Lutnick, CEO of Cantor Fitzgerald, was first interviewed after September 11, 2001, a tragedy that devastated his firm and stole the life of his brother, Lutnick stated that he now had “700 families to feed.” The view that he expressed was that his firm was responsible to the families of the wage earners lost in the tragedy, even though the firm was not responsible for the events that had occurred. Such assumed corporate responsibility, consistent with a stakeholder-based approach to management, is often considered to conflict with the law. The purpose of this Article is to demonstrate that stakeholder management does not inherently conflict with the law. In fact, principles of stakeholder thinking coincide with our moral intuitions, reflect many demonstrated best business practices, and promote profit-generation as envisioned and advocated by the law. This Article explores the nature of stakeholder relationships and their impact on business enterprises. The interconnected experiences of individuals and organizations in the wake of the events of September 11, while exemplary and perhaps more pronounced, are not isolated. The purpose of this Article is to draw upon such experiences in order to move beyond the traditional hub-and-spoke model of the firm, and to integrate past and present examples in a more dynamic, stakeholder-based model of corporate citizenship that bridges the gap between stakeholder thinking and the law and is both descriptive and normative.

Keywords: World Trade Center; Peace; Stakeholder thinking; Stakeholder theory; Citizenship; Corporate citizenship; Fiduciary law; Milton Friedman; Corporate social responsibilities; Social responsibilities; Stockholder theory; Stockholders; Stakeholders; Constituency statutes (search for similar items in EconPapers)
Pages: 58 pages
Date: 2003-01-01
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