The Application Of The Stakeholder Theory To The Management System Of TNCs

The theory of CSR (Corporation Social Responsibility) has been developed quickly since the American "Golden Age" (from the end of 19th century to the beginning of the 20th century). The stakeholder theory was derived from the former in thel960's keeping the same core, and has been becoming mature in three researching ways: descriptive/empirical, instrumental and normative. But it is more practical and direct than the former. In this paper, the essential significance of the stakeholder theory for the sustainable growth of corporations was firstly analyzed grounded on the corporation's competence theory, transaction cost theory and network theory: Under the premise of the heterogeneity of the corporations, the stakeholders are exposed to the risk of specialization of capital. So the governance mechanism of corporations will evolve to co-governance. The model of corporations' value in financial theory was modified in this paper to prove the failure of the stockholders' governance. The analysis of the network theory in industrial cooperation and internal management of corporations was borrowed to support the usefulness of the management of stakeholders with the characteristic of interaction, resource-share and coordination to the creation of unique competence of the corporation.Secondly, abundant cases about applying the stakeholder theory to the management system of TNCs were researched from different angles such as values, employees, customers, business partners, stockholders and local society.Lastly, to solve the two problems of managers-how to balance between the economic interests of the corporation with its moral commitment to stakeholders and how to balance different interests of different stakeholders, proposals were given as follows: Finding the special stakeholder groups and making clear the value of the corporation by method of factors analysis (industry, product, history, scale, industrial and social place, better measures and hard or soft bounds); prompting the reform of governance mechanism (diversification of board member, absorbing independent board member or setting up special committee for stakeholders) and the introduction of stakeholders' checking mechanism on the corporation's strategy to build the interests of stakeholders into the strategy; using the revised balanced scorecard and compatible promotion measures to implement the corporation's strategy.Globalization pushes the TNCs to change the model of making profits by reducing the possibility of their making advantaging of the less social responsibility and lower cost in underdeveloped countries compared to the developed ones. The aim of TNCs' building management system of stakeholders is to create the inimitable and non-substitutable competence. In the same way, the management system of stakeholders is also very important to the Chinese embryonic TNCs who compete intensely with the strong opponents in the rules made by the them, who dream to be built to last beyond the limit of making money.