Reimagining Profits and Stakeholder Capital to Address Tensions Among Stakeholders

David Hatherly, Ronald K. Mitchell, J. Robert Mitchell, Jae Hwan Lee

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

In this article, we use ideas from stakeholder capital maintenance theory to address tensions in allocating firm profits between stockholders and other stakeholders. We utilize a mediative thought experiment to conceptualize how multiple stakeholder interests might better be served, such that genuine firm profits (from new value creation) versus artificial firm profits (from non-wealth-producing transfers) may be identified and incentivized. We thereby examine how such accounting transfers can be envisioned as stakeholder capital to be maintained for the benefit of both the firm and the economy. We present examples to illustrate the hypothetical model proposed and its implications.

Original languageEnglish
Pages (from-to)322-350
Number of pages29
JournalBusiness and Society
Volume59
Issue number2
DOIs
StatePublished - Feb 1 2020

Keywords

  • capital maintenance theory
  • profits–people tension
  • residual stakeholders
  • stakeholder theory

Fingerprint Dive into the research topics of 'Reimagining Profits and Stakeholder Capital to Address Tensions Among Stakeholders'. Together they form a unique fingerprint.

  • Cite this