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Stakeholder Theory, Value, and Firm Performance

Published online by Cambridge University Press:  23 January 2015

Jeffrey S. Harrison  and
Andrew C. Wicks
Jeffrey S. Harrison
Affiliation:
University of Richmond
Andrew C. Wicks
Affiliation:
University of Virginia
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Abstract:

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.

Keywords

valueperformance measurementcorporate performancestakeholder theoryhappiness

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Type
Articles
Information
Business Ethics Quarterly , Volume 23 , Issue 1 , January 2013 , pp. 97 - 124
Copyright
Copyright © Society for Business Ethics 2013

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