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Stakeholder Happiness Enhancement: A Neo-Utilitarian Objective for the Modern Corporation

Published online by Cambridge University Press:  23 January 2015

Thomas M. Jones  and
Will Felps
Thomas M. Jones
Affiliation:
University of Washington
Will Felps
Affiliation:
University of New South Wales
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Abstract:

Employing utilitarian criteria, Jones and Felps, in “Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique” (Business Ethics Quarterly 23[2]: 207–38), examined the sequential logic leading from shareholder wealth maximization to maximal social welfare and uncovered several serious empirical and conceptual shortcomings. After rendering shareholder wealth maximization seriously compromised as an objective for corporate operations, they provided a set of criteria regarding what a replacement corporate objective would look like, but do not offer a specific alternative. In this article, we draw on neo-utilitarian thought to advance a refined version of normative stakeholder theory that we believe addresses a major remaining criticism of extant versions, their lack of specificity. More particularly, we provide a single-valued objective function for the corporation—stakeholder happiness enhancement—that would allow managers to make principled choices between/among policy options when stakeholder interests conflict.

Keywords

utilitarianismhappinessnormative stakeholder theoryshareholder wealth maximizationshareholder primacycorporate objective function
Type
Articles
Information
Business Ethics Quarterly , Volume 23 , Issue 3 , July 2013 , pp. 349 - 379
Copyright
Copyright © Society for Business Ethics 2013

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