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Corporate community:: a theory of the firm uniting profitability and responsibility

William E. Halal (William Halal is professor of management at George Washington University in Washington, DC. He is an authority on emerging technology, strategic management, and institutional change. For the past decade, Dr Halal has been developing the GW Forecast, an electronic network that gathers online the estimates of experts around the world and synthesizes this knowledge into the best possible forecast of emerging technology and strategy. The forecast is considered to be “a virtual think‐tank for tracking the technology revolution” (www.GWForecast.gwu.edu).)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 1 April 2000

Abstract

The general concept of stakeholder management seems to be widely accepted, but its central tenet of “balancing” interests was prominently abandoned during the 1990s, as corporations favored financial interests rather than the balanced treatment proposed by stakeholder theory. The prevailing logic of business provides little incentive to do otherwise. Managers and scholars generally think about stakeholders in terms of morality, ethics, and social responsibility rather than economic value and competitive advantage. This article presents an economic theory of the firm and supporting evidence that reconcile the conflict between profitability and responsibility. Rather than passive recipients of responsible treatment, modern stakeholders work with managers to improve their own benefits while also enhancing corporate profitability. Thus, the wealth‐creating role of business arises directly out of integrating stakeholders into a productive whole – a “corporate community.”

Keywords

Citation

Halal, W.E. (2000), "Corporate community:: a theory of the firm uniting profitability and responsibility", Strategy & Leadership, Vol. 28 No. 2, pp. 10-16. https://doi.org/10.1108/10878570010341582

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MCB UP Ltd

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