16. Stakeholder Management, Sustainability and Phronêsis

In this conceptual paper I address the question of how business should approach issues of sustainability. I present a theoretical perspective marrying three elements: First, the realization that economic metrics alone are an inadequate basis for environmental choices. Second, I contend that management should adopt stakeholder theory which views the corporation as a vehicle to improve the welfare of all those affected by its actions. Finally, I contend that leaders holding stakeholder views are best served by the Aristotelian notion of practical wisdom – phronêsis. Phronêsis is a quality of character that applies well in the case of managerial attitudes to environmental concerns, since incorporating sustainability imperatives into corporate decision-making requires practical discernment and leadership in addition to technical skill. I will briefly illustrate my case by examining the values exhibited by Ray Anderson, CEO of the international carpet manufacturer, Interface.