Stakeholder Theory, Value, and Firm Performance

This paper argues that the notion of value has been overly simplified and narrowed to focus on economic returns. Stakeholder theory provides an appropriate lens for considering a more complex perspective of the value that stakeholders seek as well as new ways to measure it. We develop a four-factor...

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Bibliographic Details
Published in:Business ethics quarterly 2013-01, Vol.23 (1), p.97-124
Main Authors: Harrison, Jeffrey S., Wicks, Andrew C.
Format: Article
Language:English
Subjects:
Business ethics
Business management
Business structures
Customers
Economic theory
Economic value
Fairness
Financial management
Happiness
Shareholders
Shareholders wealth
Stakeholders
Studies
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Summary:This paper argues that the notion of value has been overly simplified and narrowed to focus on economic returns. Stakeholder theory provides an appropriate lens for considering a more complex perspective of the value that stakeholders seek as well as new ways to measure it. We develop a four-factor perspective for defining value that includes, but extends beyond, the economic value stakeholders seek. To highlight its distinctiveness, we compare this perspective to three other popular performance perspectives. Recommendations are made regarding performance measurement for both academic researchers and practitioners. The stakeholder perspective on value offered in this paper draws attention to those factors that are most closely associated with building more value for stakeholders, and in so doing, allows academics to better measure it and enhances managerial ability to create it.
ISSN:1052-150X
2153-3326
DOI:10.5840/beq20132314