Value Maximisation, Stakeholder Theory, and the Corporate Objective Function

This paper examines the role of the corporate objective function in corporate productivity and efficiency, social welfare, and the accountability of managers and directors. I argue that since it is logically impossible to maximise in more than one dimension, purposeful behaviour requires a single valued objective function. Two hundred years of work in economics and finance implies that in the absence of externalities and monopoly (and when all goods are priced), social welfare is maximised when each firm in an economy maximises its total market value. Total value is not just the value of the equity but also includes the market values of all other financial claims including debt, preferred stock, and warrants. In sharp contrast stakeholder theory, argues that managers should make decisions so as to take account of the interests of all stakeholders in a firm (including not only financial claimants, but also employees, customers, communities, governmental officials and under some interpretations the environment, terrorists and blackmailers). Because the advocates of stakeholder theory refuse to specify how to make the necessary tradeoffs among these competing interests they leave managers with a theory that makes it impossible for them to make purposeful decisions. With no way to keep score, stakeholder theory makes managers unaccountable for their actions. It seems clear that such a theory can be attractive to the self interest of managers and directors. Creating value takes more than acceptance of value maximisation as the organisational objective. As a statement of corporate purpose or vision, value maximisation is not likely to tap into the energy and enthusiasm of employees and managers to create value. Seen in this light, change in long‐term market value becomes the scorecard that managers, directors, and others use to assess success or failure of the organisation. The choice of value maximisation as the corporate scorecard must be complemented by a corporate vision, strategy and tactics that unite participants in the organisation in its struggle for dominance in its competitive arena. A firm cannot maximise value if it ignores the interest of its stakeholders. I offer a proposal to clarify what I believe is the proper relation between value maximisation and stakeholder theory. I call it enlightened value maximisation, and it is identical to what I call enlightened stakeholder theory. Enlightened value maximisation utilises much of the structure of stakeholder theory but accepts maximisation of the long run value of the firm as the criterion for making the requisite tradeoffs among its stakeholders. Managers, directors, strategists, and management scientists can benefit from enlightened stakeholder theory. Enlightened stakeholder theory specifies long‐term value maximisation or value seeking as the firm’s objective and therefore solves the problems that arise from the multiple objectives that accompany traditional stakeholder theory. I also discuss the Balanced Scorecard, the managerial equivalent of stakeholder theory. The same conclusions hold. Balanced Scorecard theory is flawed because it presents managers with a scorecard which gives no score—that is, no single‐valued measure of how they have performed. Thus managers evaluated with such a system (which can easily have two dozen measures and provides no information on the tradeoffs between them) have no way to make principled or purposeful decisions. The solution is to define a true (single dimensional) score for measuring performance for the organisation or division (and it must be consistent with the organisation’s strategy). Given this we then encourage managers to use measures of the drivers of performance to understand better how to maximise their score. And as long as their score is defined properly, (and for lower levels in the organisation it will generally not be value) this will enhance their contribution to the firm.     

On recursive construction for balanced incomplete block designs with nested rows and columns

This paper presents a recursive method for the construction of balanced incomplete block designs with nested rows and columns.     

Large newsvendor games

We consider a game, called newsvendor game, where several retailers, who face a random demand, can pool their resources and build a centralized inventory that stocks a single item on their behalf. Profits have to be allocated in a way that is advantageous to all the retailers. A game in characteristic form is obtained by assigning to each coalition its optimal expected profit. We consider newsvendor games with possibly an infinite number of newsvendors. We prove in great generality results about balancedness of the game, and we show that in a game with a continuum of players, under a nonatomic condition on the demand, the core is a singleton. For a particular class of demands we show how the core shrinks to a singleton when the number of players increases.     

EVA在公司业绩评价中的运用

EVA是由美国纽约Stem＆Steward咨询公司提出的一种业绩评价方法，目的在于准确反映公司为股东创造的价值，促使公司管理者以股东价值最大化作为其行为准则。设计一套适合我国国情的经营业绩评价综合指标体系，应全面考虑影响经营业绩的各种因素，用EVA方法能更有效地评价公司业绩。     

皖北新农村建设中文化对地区经济发展的影响

安徽作为农业大省,尤其是皖北地区,一直是中国农村改革的探路者,在当前建设社会主义新农村的新形势下,以皖北为研究原点进行新农村建设研究具有代表性意义。如何建设皖北新农村因此成为我国理论界亟待回答的一个问题。本文通过实证和理论分析,认为农村经济现代化的过程必然与其文化变革的过程相伴相随,相互作用,对特定区域环境中的经济研究,跨学科融合,文化解释与经济解释并重,将文化变迁作为社会发展的动力,可以成为破解皖北"三农"问题,实现新农村建设目标的一种途径选择。     

Mapping the constructs of a business tourist service quality scorecard model

Abstract

The researchers sought to conceptualize models related to Service Quality (SQ), Balanced Scorecard (BSC), Customer Satisfaction (CS), and Customer Retention (CR). These models are evident within the tourism industry, but are not confirmed in business tourism. The empirical testing of a Service Quality Scorecard (SQSC) as a comprehensive SQ model, for explaining Business Tourist (BT) retention is proposed. Data was analyzed through a structural equation modeling procedure, resulting in a business tourist service quality scorecard (BT SQSC) causal model for the testing of SQ in the BT industry. Findings provide implications for business tourism practitioners to encourage business tourism performance.     

平衡记分卡在大亚湾海事处团队管理中的应用与探索

平衡计分卡将组织绩效评价与组织目标相结合,使组织成员明确组织愿景,加强了组织建设。大亚湾海事处引入平衡计分卡,从海事职责,服务对象,内部流程,学习和成长四个维度构建了团队评价指标体系,团队建设取得了显著成效。