One of the lessons of the Great Recession is that managing for shareholder value can result in damage to other stakeholders. This paper seeks to articulate a new purpose for the firm that is more legitimate than maximizing financial returns for shareholders.
The paper examines the various management alternatives: modify the shareholder value strategy; become socially responsible; and adopt radical management practices.
A central question is whether the alternative management models will contribute to corporate longevity. The paper suggests an alternative approach: the virtuous corporate.
The paper looks at the virtuous corporation which would balance the need to reward external stakeholders with relentless attention to internal excellence and virtue.
Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited