Creating Value by Sharing Values – Pluralistic Stakeholder Management through Discursive Justification

Project Description:

What should be a corporation’s normative objective from the perspective of society as a whole? There has been a vivid and controversial debate about this fundamental question within management and business ethics research. Two classical answers can be identified: While scholars like Jensen (2002) and Sundaram and Inkpen (2004) advocate, in the spirit of Milton Friedman (1970), the maximization of long term shareholder value as corporate objective, Freeman, Wicks, and Parmar (2004) and Freeman et al. (2010) suggest that corporations aim at maximizing value for all stakeholders. More recently Porter and Kramer have proposed to redefine the corporate purpose around “(…) creating shared value, not just profits per se” (2011: 64) and defining shared value (SV) as creating “(…) economic value by creating societal value” (Porter & Kramer, 2011: 77). Harrison and Wicks suggest that firms focus on the maximization of the “(…) utility created for each of a firm’s legitimate stakeholders” (2013: 102). They operationalize this goal by the “construct of happiness” which states that “(…) a stakeholder is not merely satisfied, but is happy about the amount of utility received (…)” (Harrison & Wicks, 2013: 113). Finally Jones and Felps (2013a, 2013b) argue as follows from a neo-utilitarian point of view: “The objective of the corporation should be to enhance the aggregate happiness of its normatively legitimate stakeholders over the foreseeable future” (Jones & Felps, 2013b: 358).  In this dissertation project, these recent contributions are critically analyzed from the perspective of discourse ethics and deliberative democracy. The main research objective is to develop a procedural framework for advancing SV based on recent advancements of Habermas’s communicative approach to ethics, politics and society by Rainer Forst (2002, 2012). Overall, this project aims at contributing to two streams of literature. First, it contributes to the corporate legitimacy as deliberation literature (Palazzo & Scherer, 2006; Scherer & Palazzo, 2007; Scherer & Palazzo, 2011) by providing an extended understanding of the process of discursive justification by which the societal acceptance of corporate value creation is reproduced. Second, it contributes to recent developments in the stakeholder management literature which aim at overcoming firm-centric, mainly instrumental approaches to creating economic and social value (Calton, Werhane, Hartman, & Bevan, 2013; Werhane, 2011). 

Key References:

Calton, J. M., Werhane, P. H., Hartman, L. P., & Bevan, D. 2013. Building Partnerships to Create Social and Economic Value at the Base of the Global Development Pyramid. Journal of Business Ethics, 117(4): 721–733.

Forst, R. 2002. Contexts of justice: Political philosophy beyond liberalism and communitarianism. Berkeley: University of California Press.

Forst, R. 2012. The Right to Justification - Elements of a Constructivist: Theory of Justice. Columbia: Columbia University Press.

Habermas, J. 1996. Between Facts and Norms: Contributions to a discourse theory of law and democracy. Cambridge: Polity Press.

Harrison, J. S., & Wicks, A. C. 2013. Stakeholder Theory, Value, and Firm Performance. Business Ethics Quarterly, 23(1): 97–124.

Jones, T. M., & Felps, W. 2013b. Stakeholder Happiness Enhancement: A Neo-Utilitarian Objective for the Modern Corporation. Business Ethics Quarterly, 23(3): 349–379.

Porter, M. E., & Kramer, M. R. 2011. Creating Shared Value. Harvard Business Review, 89(1/2): 62–77.

Scherer, A. G., & Palazzo, G. 2007. Toward a political conception of corporate responsibility: business and society seen from a Habermasian perspective. Academy of Management review, 32(4): 1096–1120.

Publications/Presentations:

Schormair, Maximilian J. L./Gilbert, Dirk Ulrich (2016): Das Shared Value-Konzept von Porter und Kramer – The Big Idea?, in: Wunder, Thomas (Ed.): CSR und Strategisches Management, Springer, forthcoming.

Schormair, Maximilian J. L. (2016): Shareholder, Stakeholder, or Shared Value – Which value to realign business and society?, Paper presented at the Annual Meeting of the Strategic Management Society, Berlin 2016.

Schormair, Maximilian J. L./Gilbert, Dirk Ulrich (2015): Das Shared Value-Konzept von Porter und Kramer – Der Rede wert? Eine unternehmensethische Einordnung, in: Wirtschaftswissenschaftliches Studium, Vol. 44, No. 10, pp. 579-583.

Schormair, Maximilian J. L./Gilbert, Dirk Ulrich (2015): Shared Value beyond the Porter & Kramer Paradox: A Procedural Framework, Paper presented at the Annual Meeting of the European Business Ethics Network, Copenhagen 2015.

Schormair, Maximilian J. L./Gilbert, Dirk Ulrich (2014): Realigning Business and Society through Creating Shared Value? A Procedural Framework for Advancing Shared Value, Paper presented at the Annual Meeting of the Society for Business Ethics, Philadelphia 2014.

Schormair, Maximilian J. L./Gilbert, Dirk Ulrich (2014): From Financial, to Stakeholder, to Comprehensive Value Creation: Toward Realigning Business and Society through a Procedural Conception of the Corporate Objective, Paper presented at the Philosophy of Management Conference, Chicago 2014.