Measuring Value Created for and by Stakeholders

Abstract

This paper outlines how value can be measured across four elements of the firm/stakeholder relationship beyond standard economic measures. It takes into account the perception of financial value along with non-financial benefits provided and received by the firm and its stakeholders. Focusing only upon the economic or financial outcomes of such relationships can lead to erroneous results as the money spent may not create value for the receiver, and could even do significant harm. The aggregation of views across different firms together with the perceptions of various stakeholders will allow for comparisons between firms and stakeholders. Applying this conceptual model will also reveal what is important to the firm versus what is important to the stakeholder. This paper proposes an improved approach to conceptualizing and measuring net value in which businesses can see if the value they provide exceeds the value they receive from stakeholders and vice versa.

Uncaptured Value in the Business Model: Analysing its Modes in Social Enterprises in the Sustainable Fashion Industry

“…The creation of a BM requires that the SE understands the environmental dynamics concerning the social value to be captured by its beneficiaries, pays attention to all stakeholders (Dobson et al, 2018), provides the necessary product or service value to satisfy its customers (Davies et al, 2019), communicates to the market the needs to be met and the targeted social changes (Rispal, 2016), and generates enough revenue to sustain a competitive advantage. Customer brand engagement with the enterprise reinforces the value proposition perspective of a business focused on something more than profit (Hollebeek et al, 2023;Sugai & Mahajan, 2023). In addition, a BM is dynamic and needs constant innovation to respond to changes in the surrounding business environment.…”

“…Then, this study contributes illustrating a practical application of such approach, including the perspective of uncaptured value. Also, it was considered that value from and for an SE is made from a broader perspective behind the profit (Sugai & Mahajan, 2023). In line with the SE and BM literature, such assumptions include beneficiaries, environment, suppliers, customers and other stakeholders as value givers and receivers.…”

“…However, a perspective centred primarily on profit is insufficient for surplus challenges related to climate change and social and income inequalities (Sugai & Mahajan, 2023). Value, in a broader connotation, depends on the principles and purposes.…”

“…In this context, SEs consider other stakeholders, including the beneficiaries of the delivered social value (Dobson et al, 2018). For an SE, the value definition goes beyond a product's worth and is aligned to a broader meaning: value is created when the firm does something good for itself and its stakeholders, including customers, employees, beneficiaries and the environment (Sugai & Mahajan, 2023). This hybridity is reflected in the BMs and revenue streams on which SEs depend.…”