Stakeholder value approach

Shareholder value is one of the possible answers to the question of corporate governance, which, in essence is the policy of a business – „In whose interest should a business be managed, in case ownership and management are not combined anymore in the hands of the same people?“ The answer here is: in the “best balanced” interest of all stakeholders of the business (shareholders, banks and other investors, suppliers, employees, the state…). However, the stakeholder approach cannot answer the question what this “best balanced interest” really is. The natural conclusion of this is that at the end of the day management isn’t really responsible to anyone. The business becomes a plaything of the continuously changing levels of influence of the different stakeholder groups.

One of the biggest mistakes of the stakeholder approach is that it considers customers to be a stakeholder group. Customers, however, are only interested in the product and/or service that an institution offers, and not in the institution itself.

By |2023-10-18T11:11:38+00:00October 18, 2023|Comments Off on Stakeholder value approach

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