Business & Society‘s September 2011 issue is now available online! To view the Table of Contents, please click here.
Roberto Garcia-Castro, Miguel A. Ariño, both of IESE Business School, and Miguel A. Canela, University of Barcelona, published “Over the Long-Run? Short-Run Impact and Long-Run Consequences of Stakeholder Management” in this new issue of Business & Society.
The stakeholder view of the firm has been justified under instrumental and normative bases. Whereas the instrumental basis argues that “enlightened stakeholder management” is a necessary precondition to seek shareholders’ value maximization, the normative basis relies on the observance of ethical norms by managers and the notion that the stakeholders should be treated as “ends.” Some scholars argue that both views actually converge. However, this article provides empirical evidence of the negative effects of stakeholder management in shareholders’ value in the short run and the positive effects over the long run, using a longitudinal database of 658 U.S. firms. Given the difficulties of anticipating the instrumental long-term financial effects of short-run decisions affecting the different stakeholders, the authors’ findings support the view of the normative basis for stakeholder theory based on ethics, norms, and heuristic criteria as a way to solve conflicts among the claims of different stakeholders.
To view other articles in this issue, please follow this link.