What does the term "stakeholder capitalism" refer to?

The term "stakeholder capitalism" specifically refers to an economic system that prioritizes the interests of all stakeholders involved in a business, rather than just focusing on shareholder profits. This approach recognizes that companies have responsibilities not only to their shareholders but also to employees, customers, suppliers, communities, and the environment. By considering the needs and interests of a broader group of stakeholders, businesses can contribute to sustainable economic development and social well-being, ultimately leading to a more equitable distribution of value.

The concept challenges the traditional form of capitalism, which often emphasizes short-term financial performance for shareholders. By embracing stakeholder capitalism, organizations can create long-term value and foster stronger relationships with various parties, leading to improved overall business resilience and positive societal outcomes. This understanding of the interconnectedness of various stakeholder interests is vital for sustainable practices in business today.