Abstract

This chapter briefly reviews core ideas and research results in the existing instrumental stakeholder theory (IST) literature and then applies the IST concept to the simultaneous pursuit of two objectives—advancing social welfare, the presumed goal of morally legitimate social systems in general, and preserving the key elements of shareholder wealth enhancement—the traditional goal of the corporation. In so doing, we expand the range of ethical approaches to IST beyond deontological principles (e.g., treat stakeholders fairly; be trustworthy in dealing with stakeholders) present in extant versions of IST, to a consequentialist focus (i.e., a utilitarian concern for “the greatest good for the greatest number”). Our analysis leads to a suggestion for a modified corporate objective and lays out several research questions as a starting point for a new research agenda.

Document Type

Post-print Chapter

ISBN

9781316642047

Publication Date

2019

Publisher Statement

Copyright © 2019 Cambridge University Press. This book chapter first appeared in The Cambridge Handbook of Stakeholder Theory, edited by Jeffrey S. Harrison, Jay B. Barney, R. Edward Freeman and Robert A. Phillips, 72-91, Cambridge: Cambridge University Press, 2019.

The definitive version is available at: Cambridge University Press.

Full Citation:

Jones, Thomas M. and Jeffrey S. Harrison. "Sustainable Wealth Creation: Applying Instrumental Theory to the Improvement of Social Welfare." In The Cambridge Handbook of Stakeholder Theory, edited by Jeffrey S. Harrison, Jay B. Barney, R. Edward Freeman and Robert A. Phillips, 72-91, Oxford: Oxford University Press, 2019.

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