Abstract: In this article, I offer a proposal to clarify what I believe is the proper relation between value maximization and stakeholder theory, which I call enlightened value maximization. Enlightened value maximization utilizes much of the structure of stakeholder theory but accepts maximization of the long-run value of the firm as the criterion for making the requisite tradeoffs among its stakeholders, and specifies long-term value maximization or value seeking as the firm’s objective. This proposal therefore solves the problems that arise (...) from the multiple objectives that accompany traditional stakeholder theory. I also discuss the Balanced Scorecard, which is the managerial equivalent of stakeholder theory, explaining how this theory is flawed because it presents managers with a scorecard that 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 organization or division (and it must be consistent with the organization’s strategy), and as long as their score is defined properly, (and for lower levels in the organization it will generally not be value) this will enhance their contribution to the firm. (shrink)

Increasingly research in the field of business and society suggests that ethics and corporate social responsibility can be profitable. Yet this work raises a troubling question: Is it ethical to use ethics and social responsibility in a strategic way? Is it possible to be ethical or socially responsible for the wrong reason? In this article, we define a strategy concept in order to situate the different approaches to the strategic use of ethics and social responsibility found in the current literature. (...) We then analyze the ethics of such approaches using both utilitarianism and deontology and end by defining limits to the strategic use of ethics. (shrink)

Having the ambition to contribute to the practical value of the theory on corporate social performance (CSP), this paper approaches the question whether CSP can contribute to the competitive advantage of firms. We adopted an explorative case-study methodology to explore the variety of positive and negative effects of CSP on the competitiveness of organizations. As this study aimed at identifying as great variety of these effects as possible, we selected a diversified group of respondents. Data was thus collected through embedded (...) units of analysis in a petrochemical company, and triangulated with the opinions of experts on CSP. Overall, we found various positive and negative effects of CSP on the competitiveness of organizations. CSP is therefore not an innocent adventure for executives, but rather a strategy for achieving corporate objectives. If not carefully implemented, the CSP strategy may harm the competitive advantage of the firm, as our results have suggested. (shrink)

The 'Evolution of Cooperation' addresses a simple yet age-old question; If living things evolve through competition, how can cooperation ever emerge? Despite the abundant evidence of cooperation all around us, there existed no purely naturalistic answer to this question until 1979, when Robert Axelrod famously ran a computer tournament featuring a standard game-theory exercise called The Prisoner's Dilemma. To everyone's surprise, the program that won the tournament, named Tit for Tat, was not only the simplest but the most "cooperative" entrant. (...) This unexpected victory proved that cooperation - one might even say altruism - is mathematically possible and therefore needs no hidden hand or divine agent to create and sustain it. A great roadblock to the understanding of all sorts of behavior was at last removed. The updated edition includes an extensive new chapter on cooperation in cancer cells and among terrorist organizations. (shrink)