What is 'stakeholder theory' in relation to labor rights?

Stakeholder theory in relation to labor rights emphasizes that organizations have a responsibility to take into account the interests of all parties affected by their operations, not just shareholders. This includes employees, customers, suppliers, the community, and the environment. By considering the needs and rights of employees as stakeholders, organizations can foster a more equitable and sustainable workplace. This approach recognizes that employees are essential to the success of a business and that their welfare can have significant impacts on overall organizational performance, employee morale, and productivity.

In practice, stakeholder theory encourages organizations to engage in fair labor practices, provide decent working conditions, and promote employee rights. This balance can ultimately lead to better business outcomes, as happy and respected employees tend to be more productive and committed to their work.