Meaning Structures in a Contested Issue Field: A Topographic Map of Shareholder Value in Austria

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.KEY WORDS: shareholder wealth maximization (SWM), corporate objective function, normative corporate governance, utilitarianism, social welfare "If you will pardon me for being personal, it makes a great difference in my attitude toward my job as an executive officer of the General Electric Company whether I am a trustee of the institution or an attorney for the investor. If I am a trustee, who are the beneficiaries of the trust? To whom do I owe my obligations?"-Owen D. Young, former Chairman of GE (Dodd, 1932(Dodd, : 1154 T HE ISSUE ARTICULATED BY MR. YOUNG decades ago is still relevant today and is one that a considerable number of scholars have devoted themselves to, not in terms of particular companies, but for corporations in general. This article addresses the underlying question, one that lies at the very core of corporate governance for both practicing managers and business scholars: what should be the objective of corporations in a market capitalist economy? Put somewhat differently, what should managers, who govern these firms, strive to achieve?https://www.cambridge.org/core/terms. https://doi.org/10.5840/beq201323215Downloaded from https://www.cambridge.org/core. IP address: 52.183.12.225, on 28 Apr 2019 at 03:44:10, subject to the Cambridge Core terms of use, available at Business Ethics QuarterlyWe aim to answer these questions in two separate articles. This first article will demonstrate the weaknesses of the conventional corporate objective-shareholder wealth maximization (SWM)-from a utilitarian perspective. It will focus on the apparent logic behind SWM as part of a set of institutions intended to produce maximal social welfare, the ultimate goal of utilitarian moral thought. After finding each of the four interconnected arguments that make up that logic quite weak, we suggest a path toward a credible alternative corporate objective. The second ...

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“…Importantly however, our analysis does not apply to capitalism writ large (cf. Keay, 2012;Meyer & Höllerer, 2010). …”

mentioning

confidence: 99%

Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique

2013

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“…Different polities provide the basis for a variety of 'common worlds', each with its own 'higher common principle', 'model tests', and expressions of 'judgment', constituting 'relations of worth'. The embeddedness of cognition and strategic action in such macro-level meaning structures has been extensively discussed with regard to verbal language, for instance, in research on legitimate accounts and framings (e.g., Creed, Scully, & Austin, 2002;Meyer & Höllerer, 2010), institutionalized vocabularies (e.g., Suddaby & Greenwood, 2005), and especially vocabularies of motive (e.g., Burke, 1989;Mills, 1940; for an overview, see Loewenstein, Ocasio, & Jones, 2012). In analogy to accounts and vocabularies, Höllerer et al (forthcoming) argue that different institutional logics are also characterized by a specific 'visual language', that is, specific sets of legitimated imageries -'legitimate visual accounts' or 'imageries-of-practice'.…”

Section: Cultural Embeddedness Legitimacy and Organizational Culturementioning

confidence: 99%

“…Another important line of work that deserves to be revisited with a visual research agenda in mind is the theorization and diffusion of ideas and concepts (e.g., Strang & Meyer, 1993). Strang and Soule (1998) point out that it is not practices that flow, but theorized models and their framings -which renders the role of visualization in these processes immediately obvious: Visualization and multimodal communication can be as decisive for the speed and success of diffusion as are verbal accounts and frames, especially when ideas and concepts spread 'over contested terrain' (e.g., Fiss & Zajac, 2004Meyer & Höllerer, 2010;Purdy & Gray, 2009). Thus, not only is theorization very likely multimodal, visuality is also an important mode of translating global practices into local settings.…”

Section: Cultural Entrepreneurship and Strategic Actionmentioning

confidence: 99%

The Visual Dimension in Organizing, Organization, and Organization Research: Core Ideas, Current Developments, and Promising Avenues

Meyer¹,

Höllerer

Jancsary

et al. 2013

The Academy of Management Annals

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141

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(2013) The visual dimension in organizing, organization, and organization research: Core ideas, current developments, and promising avenues. Academy of Management Annals, 7 (1). pp. 489-555. ISSN 1941-6520 This version is available at: http://epub.wu.ac.at/4991/ Available in ePub WU : April 2016 ePub WU , the institutional repository of the WU Vienna University of Economics and Business, is provided by the University Library and the IT-Services. The aim is to enable open access to the scholarly output of the WU.This document is the version accepted for publication and -in case of peer review -incorporates referee comments. There are minor differences between this and the publisher version which could however affect a citation. Abstract. With the unprecedented rise in the use of visuals, and its undeniable omnipresence in organizational contexts, as well as in the individual's everyday life, organization and management science has recently started to pay closer attention to the to date under-theorized 'visual mode' of discourse and meaning construction. Building primarily on insights from the phenomenological tradition in organization theory and from social semiotics, this article sets out to consolidate previous scholarly efforts and to sketch a fertile future research agenda. After briefly exploring the workings of visuals, we introduce the methodological and theoretical 'roots' of visual studies in a number of disciplines that have a long-standing tradition of incorporating the visual. We then continue by extensively reviewing work in the field of organization and management studies: More specifically, we present five distinct approaches to feature visuals in research designs and to include the visual dimension in scholarly inquiry. Subsequently, we outline, in some detail, promising avenues for future research, and close with a reflection on the impact of visualization on scientific practice itself.

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“…For example, business executives and directors may decide to forgo pay in favor of organizational reinvestment of earnings, stock buybacks, or large dividend payments to shareholders. Often, prioritizing shareholders over other stakeholders (i.e., a strong focus on shareholder-oriented CSP, or corporate governance reforms) is triggered not so much by firm-specific events, but by higher-level motivations of stock market revitalization or the withdrawal of the state from economic activity (i.e., by a countrywide move away from corporatism) (R. E. Meyer & Höllerer, 2010). This is unsurprising as an enhanced focus on shareholders-or firm owners-is not necessarily in the best interest of entrenched managers, who make the operational decisions about shareholder-oriented CSP.…”

Section: The Prevalence Of Macrolevel Factors For Shareholder-orientementioning

confidence: 99%

Unpacking the Drivers of Corporate Social Performance: A Multilevel, Multistakeholder, and Multimethod Analysis

et al. 2015

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The question of what drives corporate social performance (CSP) has become a vital concern for many managers and researchers of large corporations. This study addresses this question by adopting a multilevel, multistakeholder, and multimethod approach to theorize and estimate the relative influence of macro (national business system and country), meso (industry), and micro (firm-level) factors on CSP. Applying three different methods of variance decomposition analysis to an international sample of 2,060 large public companies over a time span of 5 years, our results show that firm-level factors explain the largest proportion of variance in aggregate CSP as well as CSP oriented toward communities, the natural environment, and employees. These results support our hypotheses according to which CSP is not primarily driven by macrolevel or mesolevel factors, except for shareholderoriented CSP, which is relatively more influenced by country-level factors. As a whole, our findings also point to the value of subdividing CSP into its stakeholder-specific components as this disaggregation allows for a more careful examination of distinct drivers of distinct aspects of CSP.Keywords: Corporate social performance; corporate social responsibility; decomposition of variance; hierarchical linear modeling; stakeholders; variance components analysis.Abbreviations: ANOVA = analysis of variance; CSP = corporate social performance; HLM = hierarchical linear modeling; MLE = maximum likelihood estimation; NBS = national business system; REMLE = restricted maximum likelihood estimation; VCA = variance components analysis.Unpacking 2

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Meaning Structures in a Contested Issue Field: A Topographic Map of Shareholder Value in Austria

Cited by 272 publications

References 45 publications

Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique

Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique

The Visual Dimension in Organizing, Organization, and Organization Research: Core Ideas, Current Developments, and Promising Avenues

Unpacking the Drivers of Corporate Social Performance: A Multilevel, Multistakeholder, and Multimethod Analysis

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