IDEAS home Printed from https://ideas.repec.org/a/spr/grdene/v32y2023i2d10.1007_s10726-022-09808-8.html
   My bibliography  Save this article

A Values-based Approach to Understanding Corporate- Stakeholder Interactions

Author

Listed:
  • Gary Kleinman

    (Montclair State University)

  • Dan Palmon

    (Rutgers Business School)

Abstract

This paper develops a model of focal firm-stakeholder interactions incorporating the values of each party and the possible impact of incomplete contracts between them. The paper offers a values-based analysis of the forces driving the interaction between the parties. Firms exist in a web of perceived obligations and rights. We argue that entities in firm-stakeholder relationships have operational goals supported by terminal and instrumental values that affect the way that the parties behave and interact with others. Since various parties to an interaction may have different values and goals, this model allows for strategic interactions. While some relationships are bound by law or contract, others are not. Thus, the outcome cannot be prescribed with certainty, so an important question is whether the desired outcomes can be enforced. We draw upon contract theory to explore these issues, noting that performance under any contract is problematic since it cannot be assured in advance. We argue that the determinants of outcomes between the focal firm and its stakeholder groups are affected by the values and goals of each entity, while the nature of the contracts between them and the environment within which the interactions occur influence what can be achieved.

Suggested Citation

  • Gary Kleinman & Dan Palmon, 2023. "A Values-based Approach to Understanding Corporate- Stakeholder Interactions," Group Decision and Negotiation, Springer, vol. 32(2), pages 301-326, April.
    • Handle: RePEc:spr:grdene:v:32:y:2023:i:2:d:10.1007_s10726-022-09808-8
    DOI: 10.1007/s10726-022-09808-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10726-022-09808-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10726-022-09808-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    2. Oliver Hart, 2003. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," Economic Journal, Royal Economic Society, vol. 113(486), pages 69-76, March.
    3. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02276709, HAL.
    4. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    5. Gary Kleinman & Dan Palmon, 2000. "A Negotiation-Oriented Model of Auditor-Client Relationships," Group Decision and Negotiation, Springer, vol. 9(1), pages 17-45, January.
    6. Colin Eden & Fran Ackermann, 2021. "Modelling Stakeholder Dynamics for Supporting Group Decision and Negotiation: Theory to Practice," Group Decision and Negotiation, Springer, vol. 30(5), pages 1001-1025, October.
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    9. Gary Kleinman & Pamela Strickland & Asokan Anandarajan, 2016. "The Accounting Court: Some Speculations on Why Not?," Group Decision and Negotiation, Springer, vol. 25(4), pages 845-871, July.
    10. repec:hal:journl:hal-02313079 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zeng, Huixiang & Zhang, Xinxin & Zhou, Zhifang & Zhang, Tao & Zhou, Qiong, 2022. "Does the effect of the annual year taboo exist? Empirical evidence from senior managers’ zodiac year and corporate inefficient investment," The British Accounting Review, Elsevier, vol. 54(6).
    2. Roychowdhury, Sugata & Shroff, Nemit & Verdi, Rodrigo S., 2019. "The effects of financial reporting and disclosure on corporate investment: A review," Journal of Accounting and Economics, Elsevier, vol. 68(2).
    3. Shaikh, Ibrahim A. & O'Brien, Jonathan Paul & Peters, Lois, 2018. "Inside directors and the underinvestment of financial slack towards R&D-intensity in high-technology firms," Journal of Business Research, Elsevier, vol. 82(C), pages 192-201.
    4. Fu, Fangjian & Lin, Leming & Officer, Micah S., 2013. "Acquisitions driven by stock overvaluation: Are they good deals?," Journal of Financial Economics, Elsevier, vol. 109(1), pages 24-39.
    5. Dwibedy, Punyashlok, 2022. "Informal competition and product innovation decisions of new ventures and incumbents across developing and transitioning countries," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    6. Martin Kyere & Marcel Ausloos, 2021. "Corporate governance and firms financial performance in the United Kingdom," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1871-1885, April.
    7. Tleubayev, Alisher & Bobojonov, Ihtiyor & Gagalyuk, Taras & Glauben, Thomas, 2020. "Board gender diversity and firm performance: Evidence from the Russian agri-food industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(1), pages 35-53.
    8. Manolis, Chris & Nygaard, Arne & Stillerud, Bård, 1997. "Uncertainty and vertical control: An international investigation," International Business Review, Elsevier, vol. 6(5), pages 501-518, October.
    9. Qiu, Buhui & Trapkov, Svetoslav & Yakoub, Fadi, 2014. "Do target CEOs trade premiums for personal benefits?," Journal of Banking & Finance, Elsevier, vol. 42(C), pages 23-41.
    10. Benoît Pigé, 1998. "CEOs entrenchment and shareholders' wealth [Enracinement des dirigeants et richesse des actionnaires]," Post-Print hal-02175777, HAL.
    11. Elizabeth J. Altman & Frank Nagle & Michael L. Tushman, 2013. "Innovating Without Information Constraints: Organizations, Communities, and Innovation When Information Costs Approach Zero," Harvard Business School Working Papers 14-043, Harvard Business School, revised Sep 2014.
    12. Wu, Jianfeng & Tu, Rungting, 2007. "CEO stock option pay and R&D spending: a behavioral agency explanation," Journal of Business Research, Elsevier, vol. 60(5), pages 482-492, May.
    13. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan & Shafique, Sujana & Lartey, Theophilus, 2020. "R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets," Journal of Business Research, Elsevier, vol. 106(C), pages 94-105.
    14. Ben Slimane, Faten & Padilla Angulo, Laura, 2019. "Strategic change and corporate governance: Evidence from the stock exchange industry," Journal of Business Research, Elsevier, vol. 103(C), pages 206-218.
    15. Arunima Haldar & S. V. D. Nageswara Rao & Kirankumar S. Momaya, 2016. "Can Flexibility in Corporate Governance Enhance International Competitiveness? Evidence from Knowledge-Based Industries in India," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 17(4), pages 389-402, December.
    16. Mawuena Akosua Kukah & Mohammed Amidu & Joshua Yindenaba Abor, 2016. "Corporate governance mechanisms and accounting information quality of listed firms in Ghana," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(1), pages 38-58.
    17. Mouna Mrad & Slaheddine Hallara, 2014. "The Relationship Between the Board of Directors and the Performance/Value Creation in a Context of Privatization: The Case of French Companies," Public Organization Review, Springer, vol. 14(1), pages 83-108, March.
    18. Marc Berninger & Markus Klug & Dirk Schiereck, 2018. "Börsenrückzüge infolge steigender Corporate-Governance-Anforderungen – Empirische Evidenz von 13 europäischen Kapitalmärkten [Delistings due to Increased Corporate Governance Requirements – Empiric," Schmalenbach Journal of Business Research, Springer, vol. 70(4), pages 351-391, December.
    19. Ferris, Stephen P. & Yan, Xuemin (Sterling), 2007. "Do independent directors and chairmen matter? The role of boards of directors in mutual fund governance," Journal of Corporate Finance, Elsevier, vol. 13(2-3), pages 392-420, June.
    20. John Becker-Blease & Afshad Irani, 2008. "Do corporate governance attributes affect adverse selection costs? Evidence from seasoned equity offerings," Review of Quantitative Finance and Accounting, Springer, vol. 30(3), pages 281-296, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:grdene:v:32:y:2023:i:2:d:10.1007_s10726-022-09808-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.