Uber and Stakeholder Theory: Analyzing Interests and Responsibilities

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Organization Design and Management
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Introduction
Ride-sharing organizations such as Uber comprise of the main industries in the gig
economy. In the gig-economy, a common claim that is purported by Uber is that the employees
may work ‘whenever they want’, ‘wherever they want’, and that the employees can ‘be their own
boss’. The paper frames Uber through Stakeholder’s Concept’s lens, - an ethical theory that, in
part, more broadly frames the responsibilities of organizational management-, with the intention
of analyzing and enunciating stakeholders’ interests with the platform. The stakeholder theory is
this case is pertinent at this instance in the increase of on-demand labor platforms. Freeman,
reacting to claims made by Friedman “The Social Responsibility of Business is to Create
Profits”, argues against a managerial style that is fully justified based on the stockholders.
Rather, the stakeholder theory, in this case, reacts to Uber’s design philosophy ‘The Social
Responsibility of platforms is to serve consumer needs’.
Responding to the essay question, the analysis will be based on creating an understanding
of how Uber interacts with its stakeholders on the basis of activities such as expenses and
earnings, decision-making, as well as evaluation. Uber’s different stakeholder's groups that have
got an interest in the company’s operations will be discussed. Nonetheless, the Corporate Social
Responsibility issues that are associated with these groups will as well be analyzed.
The Stakeholder Concept
The Stakeholder Theory refers to a managerial concept that initially responded to the
then, - and maybe still- dominant stockholder-centric management model. A stakeholder is a
person that is involved in something or is affected by a particular cause of action. However, a
stockholder owns corporate stock. The Stakeholder Theory responds to the type of stockholder-

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centric management model that was embodied by Milton Friedman’s claim that states “The
Social Responsibility of Business is to Increase its Profits”. Particularly, the Stakeholder Theory
offers a deferring opinion on the notion that every type of decision made in an organization
should be guided by the effect it has on the stockholders (Bridoux and Stoelhorst, 2014, pp.111).
Alternatively, a major foundation of the Stakeholder Theory holds that the primary management
responsibility comprises of the ultimate obligation of maintaining an equitable as well as a
workable balance between the employees, communities, customers, stockholders, and the general
public’s interests. The theory argues that such an outlook is aligned to the primary reason why
the corporate entity exists in the first place, which is in part due to its ability to serve the
community including all the stakeholders (Purvis, Zagenczyk and McCray, 2015, pp.11). As a
result of the complex and the contradictory nature of the interests associated with the different
stakeholders, theorists are of the opinion that it is quite hard to balance all these interests.
A device that the stakeholders' theorists apply in dealing with the complexity of having to
balance the various stakeholders’ interests is by diversifying the scope of the stakeholders'
legitimacy and identity. In the early 1990s, Freeman and Reed were inspired by Igor Ansoff’s
work and proposed a wide and narrower definition of the term stakeholder (Brown and Forster,
2013, pp.307). Considering the wider definition, a stakeholder refers to any person or an
identifiable group that has got an impact on attaining the organizational objectives. However, the
narrow view defines a stakeholder as any group or an individual who an organization depends on
for its continual survival. Responding to the essay question, the paper uses the narrow definition
of the term of stakeholders, with the core stakeholders in Uber Company comprising of the
employees, passengers, shareholders, and drivers. Nonetheless, considering the wide definition
of the term stakeholder, external stakeholders such as the taxi drivers and the community are

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acknowledged (Esmail, Moore and Rein, 2015, pp.124). Being part of an on-going effort in
Stakeholder Theory’s normative and theoretical underpinnings, researchers have argued several
normative cores in support of this theory. Among the most common cores is of the opinion that
the stakeholder-centric management theory is morally respectful and is not a viable model for
organizational as well as strategic management. The core is commonly known as the Kantian
core.
Among these core’s underpinnings include the rejection of the separation thesis that is of
the assumption that business along with ethics contradicts each other. Rather, according to
Freeman, organizations should ask itself the reasons behind its existence and beyond profit. The
other core revolves around stakeholder relationship that should be relatively as well as mutually
beneficial. Hence, the stakeholders should make mutual sacrifices that are proportional to the
benefits that they accept. The core is known as the fairness core (Fernando and Lawrence, 2014,
pp.155). The last core is the feminist core that frames companies as a network of relationships.
Realizing stakeholders’ relatedness means that it is impossible for an individual stakeholder to
succeed without having to rely on other stakeholders’ success. In some ways, the Stakeholders
Theory aims at providing managers with guidance and in recent times, there have been increased
emphases on how the theory can be put into practice. Primarily, the emphases have manifested
itself in organizations that exercise Corporate Social Responsibility or exercise sustainability in
their social science, financial, and environmental (Ferrero, Hoffman and McNulty, 2014, pp.56).
Researchers such as Wheeler and Davis identify that properly identifying and managing the
stakeholders is essential for Corporate Social Responsibility measures to stakeholders outside an
organization. In addition, having an accountable Corporate Social Responsibility audits is