Why stakeholder and stockholder theories are not necessarily contradictory: A knightian insight
AbstractThe normative foundations of the investor centered model of corporate governance, represented in mainstream economics by the nexus-of-contracts view of the firm, have come under attack, mainly by proponents of normative stakeholder theory. We argue that the nexus-of-contracts view is static and limited due to its assumption of price-output certainty. We attempt a synthesis of the nexus-of-contracts and the Knightian views, which provides novel insights into the normative adequacy of the investor-centered firm. Implications for scholarship and management practice follow from our discussion.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/591.
Length: 19 pages
Date of creation: 30 May 2005
Date of revision:
Theory of the firm; corporate governance; entrepreneurship; business ethics; stakeholder theory;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-03 (All new papers)
- NEP-BEC-2005-07-03 (Business Economics)
- NEP-CFN-2005-07-03 (Corporate Finance)
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