Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-25T20:04:25.796Z Has data issue: false hasContentIssue false
  • English
  • Français

Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique

Published online by Cambridge University Press:  23 January 2015

Thomas M. Jones  and
Will Felps
Thomas M. Jones
Affiliation:
University of Washington
Will Felps
Affiliation:
University of New South Wales
Rights & Permissions [Opens in a new window]

Abstract:

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

Many scholars and managers endorse the idea that the primary purpose of the firm is to make money for its owners. This shareholder wealth maximization objective is justified on the grounds that it maximizes social welfare. In this article, the first of a two-part set, we argue that, although this shareholder primacy model may have been appropriate in an earlier era, it no longer is, given our current state of economic and social affairs. To make our case, we employ a utilitarian moral standard and examine the apparent logical sequence behind the link between shareholder wealth maximization and social welfare. Upon close empirical and conceptual scrutiny, we find that utilitarian criteria do not support the shareholder model; that is, shareholder wealth maximization is only weakly linked to social welfare maximization. In view of the dubious validity of this sequential argument, we outline some of the features of a superior corporate objective—a variant of normative stakeholder theory. In the second article, we will advance and defend our preferred alternative and then discuss some institutional arrangements under which it could be implemented.

Keywords

shareholder wealth maximization (SWM)corporate objective functionnormative corporate governanceutilitarianismsocial welfare
Type
Articles
Information
Business Ethics Quarterly , Volume 23 , Issue 2 , April 2013 , pp. 207 - 238
Copyright
Copyright © Society for Business Ethics 2013

References

REFERENCES

Agle, B.R.,Donaldson, T.Freeman, R.E.,Jensen, M.C., Mitchell, R.K., & Wood, D.J. 2008. Dialogue: Toward a superior stakeholder theory. Business Ethics Quarterly, 18: 153–90. http://dx.doi.org/10.5840/beq200818214CrossRefGoogle Scholar
Alexander, L. 1999. Determining board effectiveness. New York: Conference Board Research Reports.Google Scholar
Arnott, R., Greenwald, B., Kanbur, R.,& Nalebuff, B. (Eds.). 2003. Economics for an imperfect world: Essays in honor of Joseph E. Stiglitz. Cambridge,Mass.: MIT Press.CrossRefGoogle Scholar
Audi, R. 2007. Can utilitarianism be distributive? Maximization and distribution as criteria in managerial decisions. Business Ethics Quarterly, 17(4): 593– 611. http://dx.doi.org/10.5840/beq20071741CrossRefGoogle Scholar
Bainbridge, S.M. 1993. In defense of the shareholder wealth maximization norm: A reply to Professor Green. Washington and Lee Law Review, 50: 1423–48.Google Scholar
Bainbridge, S.M. 2002. Director primacy: The means and ends of corporate governance. Northwestern University Law Review, 97: 547.Google Scholar
Barney, J.B., & Hansen, M.H. 1994. Trustworthiness as a source of competitive advantage. Strategic Management Journal, 15: 175–90. http://dx.doi.org/10.1002/smj.4250150912CrossRefGoogle Scholar
Baumol, W.J., Panzar, J.C., & Willig, R.D. 1982. Contestable markets and the theory of industry structure. New York: Harcourt Brace Jovanovich.Google Scholar
Beekun, R.I., & Badawi, J.A. 2005. Balancing ethical responsibility among multiple organizational stakeholders: The Islamic perspective. Journal of Business Ethics, 60(2): 131–45. http://dx.doi.org/10.1007/s10551-004-8204-5CrossRefGoogle Scholar
Berle, A.A. 1931. Corporate powers as powers in trust. Harvard Law Review, 44: 1049–74. http://dx.doi.org/10.2307/1331341CrossRefGoogle Scholar
Blair, M.M.,& Stout, L.A. 1999. A team production theory of corporate law. Virginia Law Review, 85: 247– 303. http://dx.doi.org/10.2307/1073662CrossRefGoogle Scholar
Blanchflower, D.G.,& Oswald, A.J. 2011. International happiness: A new view on the measure of performance. Academy of Management Perspectives, 25: 6– 22. http://dx.doi.org/10.5465/AMP.2011.59198445Google Scholar
Boatright, J.R. 1994. Fiduciary duties and the shareholder-management relation: Or, what’s so special about shareholders?. Business Ethics Quarterly, 4(4): 393– 407. http://dx.doi.org/10.2307/3857339CrossRefGoogle Scholar
Boatright, J.R. 2006. What’s wrong-and what’s right-with stakeholder management. Journal of Private Enterprise, 21(2): 106–30.Google Scholar
Bosse, D.A., Phillips, R.A.,& Harrison, J.S. 2009. Stakeholders, reciprocity, and firm performance. Strategic Management Journal, 30: 447–56. http://dx.doi.org/10.1002/smj.743CrossRefGoogle Scholar
Bowen, H.R. 1953. Social responsibilities of the businessman. New York: Harper.Google Scholar
Bowie, N.E. 1998. A Kantian theory of capitalism. Business Ethics Quarterly,1: 37– 60.CrossRefGoogle Scholar
Brickman, P.,Coates, D.,& Janoff-Bulman, R. 1978. Lottery winners and accident victims: Is happiness relative?. Journal of Personality and Social Psychology, 36(8): 917–27. http://dx.doi.org/10.1037/0022-3514.36.8.917CrossRefGoogle ScholarPubMed
Browning, L.D.,Beyer, J.M.,& Shetler, J.C. 1995. Building cooperation in a competitive industry. Academy of Management Journal, 38: 113–51. http://dx.doi.org/10.2307/256730CrossRefGoogle Scholar
Carter, C.F. 1968. Wealth: An essay on the purposes of economics. London: Watts.Google Scholar
Chandler, A.D. 1977. The visible hand: The managerial revolution in American business. Cambridge, Mass.: Harvard University Press.Google Scholar
Child, J.,& Möllering, G. 2003. Contextual confidence and active trust development in the Chinese business environment. Organization Science, 14(1): 69– 80. http://dx.doi.org/10.1287/orsc.14.1.69.12813CrossRefGoogle Scholar
Comanor, W.S. 1967. Market structure, product differentiation, and industrial research. The Quarterly Journal of Economics, 81(4): 639–57. http://dx.doi.org/10.2307/1885583CrossRefGoogle Scholar
Cone/Roper Study 2004. A benchmark survey of consumer awareness and attitudes towards cause related marketing. Boston: Cone Communications.Google Scholar
Cullen, J.B.,Parboteeah, K.P.,& Victor, B. 2003. The effects of ethical climates on organizational commitment: A two-study analysis. Journal of Business Ethics, 46(2): 127–41. http://dx.doi.org/10.1023/A:1025089819456CrossRefGoogle Scholar
Davis, K. 1973. The case for and against business assumption of social responsibilities. Academy of Management Journal, 16: 312–22. http://dx.doi.org/10.2307/255331CrossRefGoogle Scholar
de Luque, D.,Washburn, N.T.,Waldman, D.A.,& House, R.J. 2008. Unrequited profit: How stakeholder and economic values relate to subordinates’ perceptions of leadership and firm performance. Administrative Science Quarterly, 53: 626–54. http://dx.doi.org/10.2189/asqu.53.4.626CrossRefGoogle Scholar
Demsetz, H. 1975. Two systems of belief about monopolyIn Goldschmid, H.Mann, H.M.,& Weston, J.E.(Eds.),Industrial concentration: The new learning. 164–84. Boston: Little, Brown.Google Scholar
Diener, E. 2000. Subjective well-being: The science of happiness and a proposal for a national index. American Psychologist, 55: 34– 43. http://dx.doi.org/10.1037/0003-066X.55.L34CrossRefGoogle Scholar
Diener, E.,& Biswas-Diener, R. 2002. Will money increase subjective well-being? A literature review and guide to needed research. Social Indicators Research, 119–69. http://dx.doi.org/10.1023/A:1014411319119CrossRefGoogle Scholar
Diener, E.,& Seligman, M.E.P. 2004. Beyond money: Towards an economy of well-being. Psychological Science in the Public Interest, 5(1): 1– 31. http://dx.doi.org/10.1111/j.0963-7214.2004.00501001.x CrossRefGoogle Scholar
Diener, E.Suh, E.M.,Lucas, R.E.,& Smith, H.E. 1999. Subjective well-being: Three decades of progress. Psychological Bulletin, 125: 276– 302. http://dx.doi.org/10.1037/0033-2909.125.2.276CrossRefGoogle Scholar
Dodd, E.M. 1932. For whom are corporate managers trustees?. Harvard Law Review, 45: 1145–63. http://dx.doi.org/10.2307/1331697CrossRefGoogle Scholar
Donaldson, T. 1999. Making stakeholder theory whole. Academy of Management Review, 24: 237–41. http://dx.doi.org/10.2307/259079Google Scholar
Donaldson, T. 2006. Squaring the circle: Superimposing the normative on the empirical. Symposium presentation at the annual meeting of the Academy of Management Atlanta.Google Scholar
Donaldson, T. 2007. Should business be moral? Zeitschrift für Wirtschafts- und Unternehmensethik. Mering, 8(3): 270–75.CrossRefGoogle Scholar
Donaldson, T. 2008. Pre-constructing opposites: Normative triangulation. Symposium presentation at the annual meeting of the Academy of Management Anaheim.Google Scholar
Donaldson, T. 2012. The epistemic fault line in corporate governance. Academy of Management Review, 37(2: 256–71. http://dx.doi.org/10.5465/amr.2010.0407CrossRefGoogle Scholar
Donaldson, T.,& Dunfee, T.W. 1994. Towards a unified conception of business ethics: Integrative social contracts theory. Academy of Management Review, 19: 252–84. http://dx.doi.org/10.5465/amr.2010.0407CrossRefGoogle Scholar
Donaldson, T.,& Preston, L.E. 1995. The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20: 65–91.CrossRefGoogle Scholar
Dore, R. 1983. Goodwill and the spirit of market capitalism. British Journal of Sociology, 34: 459–82.http://dx.doi.org/10.2307/590932CrossRefGoogle Scholar
Doz, Y.L. 1996. The evolution of cooperation in strategic alliances: Initial conditions or learning processes?. Strategic Management Journal, 17: 55–83. http://dx.doi.org/10.1002/smj.4250171006CrossRefGoogle Scholar
Dyer, J.H.,& Chu, W. 2003. The role of trustworthiness in reducing transaction costs and improving performance: Empirical evidence from the United States, Japan, and Korea. Organization Science, 14(1): 57– 68. http://dx.doi.org/10.1287/orsc.14.L57.12806CrossRefGoogle Scholar
Dyer, J.H.,& Hatch, N. 2006. Relation-specific capabilities and barriers to knowledge transfers: Creating advantage through network relationships. Strategic Management Journal, 27: 701–19. http://dx.doi.org/10.1002/smj.543CrossRefGoogle Scholar
Easterbrook, G. 2003. The progress paradox: How life gets better while people feel worse New York: Random House.Google Scholar
Easterlin, R.A. 2001. Income and happiness: Towards a unified theory. The Economic Journal, 111(473): 465–84. http://dx.doi.org/10.1111/1468-0297.00646CrossRefGoogle Scholar
Ehrlich, C. 2005. Is business ethics necessary?. DePaul Business & Commercial Law Journal, 4: 55– 86.Google Scholar
Erhard, W.,Jensen, M.C.,& Zaffron, S.. 2008.Working Paper. No. 06-11,http://ssrn.com/abstract=920625.Harvard Business School NOM.Google Scholar
Evan, W.M.,& Freeman, R.E. 1993. A stakeholder theory of the modern corporation: Kantian capitalism. In Beauchamp, T.L.& Bowie, N.E.(Eds.), Ethical theory and business: 97–106. Englewood Cliffs, N.J.: Prentice Hall.Google Scholar
Fannon, I.L. 2003. Working within two kinds of capitalism: Corporate governance and employee stakeholding-US and EC perspectives: Oxford: Hart Publishing.Google Scholar
Ferraro, F., Pfeffer, J.,& Sutton, R.I. 2005. Economic language and assumptions: How theories can become self-fulfilling. Academy of Management Review, 30(24): 8– 24. http://dx.doi.org/10.5465/AMR.2005.15281412CrossRefGoogle Scholar
Frank, B.,& Schulze, G.G. 2000. Does economics make citizens corrupt?. Journal of Economic Behavior & Organization, 43(1): 101–13. http://dx.doi.org/10.1016/S0167-2681(00)00111-6CrossRefGoogle Scholar
Frank, R.H. 1988. Passions within reason: The strategic role of the emotions: New York: W.W. Norton & Co.Google Scholar
Frank, R.H. 1999. Luxury fever: Why money fails to satisfy in an era of excess: New York: Free Press.Google Scholar
Frank, R.H.,Gilovich, T.,& Regan, D.T. 1993. Does studying economics inhibit cooperation? The Journal of Economic Perspectives, 7(2): 159–71. http://dx.doi.org/10.1257/jep.7.2.159CrossRefGoogle Scholar
Freeman, R.E.,Harrison, J.S.Wicks, A.C.Parmar, B.,& De Colle, S. 2010. Stakeholder theory: The state of the art. Cambridge: Cambridge University Press. http://dx.doi.org/10.1017/CBO9780511815768CrossRefGoogle Scholar
Freeman, R.E.,Wicks, A.C.,& Parmar, B. 2004.Stakeholder theory and “The corporate objective revisited.” Organization Science, 15: 364–69. http://dx.doi.org/10.1287/ orsc.1040.0066CrossRefGoogle Scholar
Frey, B.S.,& Stutzer, A. 2002. Happiness and economics: How the economy and institutions affect human well-being. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Friedman, M. 1962. Capitalism and freedom. Chicago: University of Chicago Press.Google Scholar
Friedman, M. 1970. The social responsibility of business is to increase its profits. New York Times Magazine (September 13).Google Scholar
Galbraith, J.K. 1958. The affluent society. Boston: Houghton Mifflin.Google Scholar
Gale, B.T. 1972. Market share and rate of return. The Review of Economics and Statistics, 54(4): 412. http://dx.doi.org/10.2307/1924568CrossRefGoogle Scholar
Ghemawat, P.,& Costa, J.E.R.I. 1993. The organizational tension between static and dynamic efficiency. Strategic Management Journal, 14: 59–73. http://dx.doi.org/10.1002/smj.4250141007CrossRefGoogle Scholar
Ghoshal, S. 2005. Bad management theories are destroying good management practices. Academy of Management Learning & Education, 4(1): 75– 91. http://dx.doi.org/10.5465/AMLE.2005.16132558CrossRefGoogle Scholar
Ghoshal, S.,Bartlett, C.A.,& Moran, P. 1999. A new manifesto for management. MIT Sloan Management Review, 40(3): 9– 20.Google Scholar
Ghoshal, S.,& Moran, P. 1996. Bad for practice: A critique of the transaction cost theory. Academy of Management Review, 21: 13– 47.CrossRefGoogle Scholar
Gordon, J.N. 2007. The rise of independent directors in the United States, 1950–2005: Of shareholder value and stock market prices. Stanford Law Review, 59(6): 1465.Google Scholar
Gould, S.J. 1999. Rocks of ages: Science and religion in the fullness of life. London: Random House.Google Scholar
Graham, C.,& Pettinato, S. 2002. Happiness and hardship: Opportunity and insecurity in new market economies. Washington, D.C.: Brookings Institution Press.Google Scholar
Grant, R.M. 1996. Toward a knowledge-based theory of the firm. Strategic Management Journal, 17: 109–22.CrossRefGoogle Scholar
Green, R.M. 1993. Shareholders as stakeholders: Changing metaphors of corporate gover-nance. Washington and Lee Law Review, 50: 1409.Google Scholar
Hagerty, M.R. 2000. Social comparisons of income in one's community: Evidence from national surveys of income and happiness. Journal of Personality and Social Psychology, 78(4): 764–71. http://dx.doi.org/10.1037/0022-3514.784.764CrossRefGoogle ScholarPubMed
Hardin, G. 1968. The tragedy of the commons. Science, 162(3859): 1243–48. http://dx.doi.org/10.1037/0022-3514.784.764CrossRefGoogle ScholarPubMed
Harr, J. 1996. A civil action. New York: Vintage.Google Scholar
Helliwell, J.F. 2003. How ’s life? Combining individual and national variables to explain subjective well-being. Economic Modeling, 20: 331–60. http://dx.doi.org/10.1016/S0264-9993(02)00057-3CrossRefGoogle Scholar
Helliwell, J.F.,& Huang, H. 2008. How ’s your government? International evidence linking good government and well-being. British Journal of Political Science, 38: 595–619. http://dx.doi.org/10.1017/S0007123408000306CrossRefGoogle Scholar
Henderson, D. 2001. Misguided virtue: False notions of corporate social responsibility. London: Institute of Economic Affairs.Google Scholar
Hendry, J. 2001. Economic contract versus social relationships as a foundation for normative stakeholder theory. Business Ethics: European Review, 10: 223–32. http://dx.doi.org/10.1111/1467-8608.00236CrossRefGoogle Scholar
Hendry, J. 2004. Between enterprise and ethics: Business and management in a bimoral society. Oxford: Oxford University Press. http://dx.doi.org/10.1093/acprof:oso/9780199268634.001.0001CrossRefGoogle Scholar
Hicks, J.R. 1939. The foundations of welfare economics. The Economic Journal, 49(196): 696– 712http://dx.doi.org/10.2307/2225023CrossRefGoogle Scholar
Hillman, A.J.Keim, G.D.,& Schuler, D. 2004. Corporate political activity: A review and research agenda. Journal of Management, 30(6): 837–57. http://dx.doi.org/10.1016Zj.jm.2004.06.003CrossRefGoogle Scholar
Hosmer, L.T. 1994. Why be moral? A different rationale for managers. Business Ethics Quarterly, 4: 191– 204http://dx.doi.org/10.2307/3857491CrossRefGoogle Scholar
Hosmer, L.T.,& Kiewitz, C. 2005. Organizational justice: A behavioral science concept with critical implications for business ethics and stakeholder theory. Business Ethics Quarterly, 15: 67– 91http://dx.doi.org/10.5840/beq20051513CrossRefGoogle Scholar
Inkpen, A.C.,& Currall, S.C. 2004. The coevolution of trust, control, and learning in joint ventures. Organization Science, 15(5): 586– 99http://dx.doi.org/10.1287/orsc.1040.0079CrossRefGoogle Scholar
Jacobson, R. 1992. The “Austrian” school of strategy. Academy of Management Review, 17: 782– 807CrossRefGoogle Scholar
Jayadev, A.,& Bowles, S. 2006. Guard labor. Journal of Development Economics, 79(2): 328–48. http://dx.doi.org/10.1016/jjdeveco.2006.01.009CrossRefGoogle Scholar
Jensen, M.C. 2002. Value maximization, stakeholder theory and the corporate objective. Business Ethics Quarterly, 12: 235–56. http://dx.doi.org/10.2307/3857812CrossRefGoogle Scholar
Jensen, M.C.,& Meckling, W.H. 1976. Value maximization, stakeholder theory and the corporate objective. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(60): 305–60. http://dx.doi.org/10.1016/0304-405X(76)90026-XGoogle Scholar
Jones, T.M. 1976. Corporate social responsibility revisited, redefined. California Management Review, 22(3): 59–67. http://dx.doi.org/10.2307/41164877CrossRefGoogle Scholar
Jones, T.M. 1995. Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20: 404–37.CrossRefGoogle Scholar
Jones, T.M.Felps, W.,& Bigley, G.A. 2007. Ethical theory and stakeholder-related de-cisions: The role of stakeholder culture. Academy of Management Review, 32: 137–55. http://dx.doi.org/10.5465/AMR.2007.23463924CrossRefGoogle Scholar
Kagan, S. 1991. The limits of morality. Oxford: Clarendon Press. http://dx.doi.org/10.1093/0198239165.001.0001CrossRefGoogle Scholar
Kaldor, N. 1939. Welfare propositions in economics and interpersonal comparisons of utility. Economic Journal, 49(195: 549–52. http://dx.doi.org/10.2307/2224835CrossRefGoogle Scholar
Kaplow, L.,& Shavell, S. 2001. Fairness versus welfare. Harvard Law Review, 114(4): 961– 1388. http://dx.doi.org/10.2307/1342642CrossRefGoogle Scholar
Kasser, T., Ryan, R.M.Couchman, C.E., & Sheldon, K.M. 2004. Materialistic values: Their causes and consequences.In Kasser, T.& Kanner, A.D.(Eds.), Psychology and consumer culture: The struggle for a good life in a materialistic world: 11– 28. Washington, D.C.: American Psychological Association.CrossRefGoogle Scholar
Keay, A. 2012. The enlightened shareholder value principle and corporate governance. London: Routledge.CrossRefGoogle Scholar
Keynes, J.M. 1936. The general theory of employment, interest and money. London: Macmillan.Google Scholar
King, L.A.,& Napa, C.K. 1998. What makes a life good?. Journal of Personality and Social Psychology, 75: 156–65. http://dx.doi.org/10.1037/0022-3514.75.1.156CrossRefGoogle ScholarPubMed
Kogut, B.,& Zander, U. 1996. What firms do? Coordination, identity, and learning. Organization Science, 7: 502–18. http://dx.doi.org/10.1287/orsc.7.5.502CrossRefGoogle Scholar
Korn/Ferry International 2000. 27th Annual Board of Directors Study 2000.Google Scholar
Krugman, P. 2007. The conscience of a liberal. New York: W.W. Norton.Google Scholar
Kuhn, T.S. 1962. The structure of scientific revolutions.(1st ed.). Chicago: University of Chicago Press.Google Scholar
Kuttner, R. 1999. Everything for sale: The virtues and limits of markets. Chicago: University of Chicago Press.Google Scholar
Lane, R.E. 2000. The loss of happiness in market democracies. New Haven,Conn.: Yale University Press.Google Scholar
Laplume, A.O., Sonpar, K.,& Litz, R.A. 2008. Stakeholder theory: Reviewing a theory that moves us. Journal of Management, 34(6): 1152–89. http://dx.doi.org/10.1177/0149206308324322CrossRefGoogle Scholar
Leavitt, T. 1958. The dangers of social responsibility. Harvard Business Review, 36 41–50.Google Scholar
Lee, I.B. 2005. Is there a cure for corporate “psychopathy”?. American Business Law Journal, 42 (1-6): 65–90.CrossRefGoogle Scholar
Lindblom, C.E. 2002. The market system: What it is, how it works, and what to make of it. New Haven,Conn.: Yale University Press.Google Scholar
Lipsey, R.G.,& Lancaster, K. 1956. The general theory of second best. Review of Economic Studies, 24(1): 11–32. http://dx.doi.org/10.2307/2296233CrossRefGoogle Scholar
Machold, S.Ahmed, P.K.,& Farquhar, S.S. 2008. Corporate governance and ethics: A feminist perspective. Journal of Business Ethics, 81(3): 665–78. http://dx.doi.org/10.1007/s10551-007-9539-5CrossRefGoogle Scholar
MacKenzie, D.A. 2006. An engine, not a camera: How financial models shape markets. Cambridge, Mass.: MIT Press.CrossRefGoogle Scholar
Maitland, I. 1994. The morality of the corporation: An empirical or normative disagreement?. Business Ethics Quarterly, 4: 445–58. http://dx.doi.org/10.2307/3857343CrossRefGoogle Scholar
Marcoux, A.M. 2000. Balancing act.In DesJardins, J.R.& McCall, J.J. (Eds.), Contemporary issues in business ethics: 92–98. Stamford, Conn.: Wadsworth/Thomson Learning.Google Scholar
Margolis, J.D.,& Walsh, J.P. 2003. Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48(2): 268– 305. http://dx.doi.org/10.2307/3556659CrossRefGoogle Scholar
Marks, N., Abdallah, S., Simms, A.,& Thompson, S. 2006. The happy planet index. London: New Economics Foundation.Google Scholar
Marx, K. 1867. Das Capital. Hamburg: Verlag von Otto Meissner.Google Scholar
Matheson, J.H.,& Olson, B.A. 1991. Corporate law and the longterm shareholder model of corporate governance. Minnesota Law Review, 76: 1313–92.Google Scholar
Matheson, P. 1968. Economic theory and the meaning of competition. Quarterly Journal of Economics, 637–56.Google Scholar
Meyer, R.E.,& Höllerer, M.A. 2010. Meaning structures in a contested issue field: A topographic map of shareholder value in Austria. Academy of Management Journal, 53(6): 1241–62. http://dx.doi.org/10.5465/AMJ.2010.57317829CrossRefGoogle Scholar
Mill, J.S. 1863. Utilitarianism. London: Parker,Son, and Bourn.Google Scholar
Mohr, L.A., Webb, D.J.,& Harris, K.E. 2001. Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior. Journal of Consumer Affairs, 35(1): 45– 72. http://dx.doi.org/10.1111/j.1745-6606.2001.tb00102.xCrossRefGoogle Scholar
Moore, G. 2012. The virtue of governance, the governance of virtue. Business Ethics Quarterly, 22(2): 293– 318. http://dx.doi.org/10.5840/beq201222221CrossRefGoogle Scholar
Nickerson, C., Schwarz, N.,Diener, E.,& Kahneman, D. 2003. Zeroing in on the dark side of the American dream: A closer look at the negative consequences of the goal for financial success. Psychological Science, 14(6): 531–36. http://dx.doi.org/10.1046/j.0956-7976.2003.psci_1461.xCrossRefGoogle Scholar
Offer, A. 2006. The challenge of affluence: Self-control and well-being in the United States and Britian since 1950. Oxford: Oxford University Press.Google Scholar
Orlitzky, M. 2011. Institutional logics in the study of organizations: The social construction of the relationship between corporate social and financial performance. Business Ethics Quarterly, 21(3): 409. http://dx.doi.org/10.5840/beq201121325CrossRefGoogle Scholar
Orlitzky, M.Schmidt, F.L.,& Rynes, S.L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3): 403–41. http://dx.doi.org/10.1177/0170840603024003910CrossRefGoogle Scholar
Orr, D.V. 1998. Strategic bankruptcy and private pension default. Journal of Economic Issues. 669–87.CrossRefGoogle Scholar
Oswald, A.J. 1997. Happiness and economic performance. Economic Journal, 107: 1815–31. http://dx.doi.org/10.1111/j.1468-0297.1997.tb00085.xCrossRefGoogle Scholar
Pareto, V. 1971. Manual of political economy. New York: Augustus Kelley.Google Scholar
Payne, G.T.Brigham, K.H.Broberg, J.C.Moss, T.W.,& Short, J.C. 2011. Organizational virtue orientation and family firms. Business Ethics Quarterly, 21(2): 257–85.CrossRefGoogle Scholar
Phillips, R.A. 1997. Stakeholder theory and a principle of fairness. Business Ethics Quarterly, 7: 51–66. http://dx.doi.org/10.2307/3857232CrossRefGoogle Scholar
Phillips, R.A. 2003. Stakeholder theory and organizational ethics. San Francisco: Berrett-Koehler.Google Scholar
Posner, R.A. 1979. Utilitarianism, economics, and legal theory. Journal of Legal Studies, 8(1): 103–40. http://dx.doi.org/10.1086/467603CrossRefGoogle Scholar
Post, J.E.Preston, L.E.,& Sachs, S. 2002. Redefining the corporation: Stakeholder management and organizational wealth. Stanford, Calif.: Stanford University Press.CrossRefGoogle Scholar
Pye, A. 2002. The changing power of “explanations”: Directors, academics and their sen-semaking from 1989 to 2000. Journal of Management Studies, 39(7): 907–25. http://dx.doi.org/10.1111/1467-6486.00317CrossRefGoogle Scholar
Quinn, D.,& Jones, T.M. 1995. An agent morality view of business policy. Academy of Management Review, 20: 22–42. CrossRefGoogle Scholar
Rappaport, A. 1986. Creating shareholder value: A guide for managers and investors. New York: The Free Press.Google Scholar
Ratner, R.K.,& Miller, D.T. 2001. The norm of self-interest and its effects on social action. Journal of Personality and Social Psychology, 81(1): 5–16. http://dx.doi.org/10.1037/0022-3514.81.L5CrossRefGoogle ScholarPubMed
Rebérioux, A. 2002. European style of corporate governance at the crossroads. JCMS: Journal of Common Market Studies, 40(1): 111–34. http://dx.doi.org/10.1111/1468-5965.00346Google Scholar
Rebérioux, A. 2007. Does shareholder primacy lead to a decline in managerial accountability?. Cambridge Journal of Economics, 31(4): 507–24. http://dx.doi.org/10.1093/cje/bem009CrossRefGoogle Scholar
Schwartz, M.S. 2006. God as a managerial stakeholder?. Journal of Business Ethics, 66 (2-3): 291–306. http://dx.doi.org/10.1007/s10551-005-5599-6CrossRefGoogle Scholar
Schyns, P. 2003. Income and life satisfaction: A cross-national and longitudinal study. Delft, Netherlands: Eburon.Google Scholar
Scott, W.R. 1995. Institutions and organizations. Thousand Oaks,Calif.: Sage.Google Scholar
Sheehy, B. 2005. Scrooge-The reluctant stakeholder: Theoretical problems in the shareholder-stakeholder debate. University of Miami Business Law Review, 14: 193–240.Google Scholar
Shiller, R. 2000. Irrational exuberance. Princeton, N.J.: Princeton University Press.Google Scholar
Sidgwick, H. 1879. The establishment of ethical first principles. Mind, 4(13): 106–11.http://dx.doi.org/10.1093/mind/os-4.13.106CrossRefGoogle Scholar
Singer, P.A.D. 2011. Practical ethics (3rd ed.). Cambridge: Cambridge University Press.http://dx.doi.org/10.1017/CBO9780511975950CrossRefGoogle Scholar
Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations. Chicago: University of Chicago Press.Google Scholar
Smith, D.G. 1998. The shareholder primacy norm. Journal of Corporate Law, 23: 277–310.Google Scholar
Solomon, R.C. 1992. Ethics and excellence: Cooperation and integrity in business. Oxford: Oxford University Press.Google Scholar
Soule, E., Hedahl, M.,& Dienhart, J. 2009. Principles of managerial moral responsibility. Business Ethics Quarterly, 19(4): 529–52.CrossRefGoogle Scholar
Stern, N. 2007. The economics of climate change: The Stern review. Cambridge: Cambridge University Press.CrossRefGoogle ScholarPubMed
Stigler, G.J. 1957. Perfect competition, historically contemplated. Journal of Political Economy. 65: 1–16. http://dx.doi.org/10.1086/257878CrossRefGoogle Scholar
Stout, L.A. 2002. Bad and not-so-bad arguments for shareholder primacy. Southern California Law Review. 75: 1189–1210.Google Scholar
Stout, L.A. 2012. The shareholder value myth: How putting shareholders first harms investors, corporations, and the public. San Francisco: Berrett-Koehler Publishers.Google Scholar
Sundaram, A.K.,& Inkpen, A.C. 2004. The corporate objective revisited. Organization Science. 15: 350–63.http://dx.doi.org/10.1287/orsc.1040.0068CrossRefGoogle Scholar
Tinsley, C.H., O’Connor, K.M.,& Sullivan, B.A. 2002. Tough guys finish last: The perils of a distributive reputation. Organizational Behavior and Human Decision Processes. 88(2): 621–42.http://dx.doi.org/10.1016/S0749-5978(02)00005-5CrossRefGoogle Scholar
Turban, D.B.,& Greening, D.W. 1997. Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal. 40(3): 658–72.http://dx.doi.org/10.2307/257057CrossRefGoogle Scholar
Uzzi, B. 1996. The sources and consequences of embeddedness for the economic performance of organizations: The network effect. American Sociological Review. 61: 674–98.http://dx.doi.org/10.2307/2096399CrossRefGoogle Scholar
Uzzi, B. 1997. Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly, 42(1): 35– 67. http://dx.doi.org/10.2307/2393808CrossRefGoogle Scholar
van Oosterhout, H.J.Heugens, P.M.A.R., & Kaptein, M. 2006. The internal morality of contracting: Advancing the contractualist endeavor in business ethics. Academy of Management Review, 31(3): 521–39.http://dx.doi.org/10.5465/AMR.2006.21318915CrossRefGoogle Scholar
Velamuri, S.R.,& Venkataraman, S. 2005. Why stakeholder and stockholder theories are not necessarily contradictory: A Knightian insight. Journal of Business Ethics, 61: 249–62.http://dx.doi.org/10.1007/s10551-005-4733-9CrossRefGoogle Scholar
Wallman, S.M.H. 1998. Understanding the purpose of a corporation: An introduction. Journal of Corporation Law, 24: 807–18.Google Scholar
Walsh, J.P., Weber, K., & Margolis, J.D. 2003. Social issues and management: Our lost cause found. Journal of Management, 29(6): 859–81.CrossRefGoogle Scholar
White, R.E. 1986. Generic business strategies, organizational context and performance: An empirical investigation. Strategic Management Journal, 7(3): 217–31.http://dx.doi.org/10.1002/smj.4250070304CrossRefGoogle Scholar
Wicks, A.C.Gilbert, D.R.,& Freeman, R.E. 1994. A feminist reinterpretation of the stakeholder concept. Business Ethics Quarterly, 4: 475–98.http://dx.doi.org/10.2307/3857345CrossRefGoogle Scholar
Zaheer, A., McEvily, B.B.,& Perrone, V. 1998. Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance. Organization Science, 9: 141–59.CrossRefGoogle Scholar