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28 Cards in this Set

  • Front
  • Back

Shareholder approach

1) A clear mission for the firm

2) A single type of clients (shareholders)

3) A system without ambiguity of motivation for the management

4) Clear system for decision making, of responsibility and rewards for the management

Stakeholder approach

1) More missions with potential conflicts among them

2) Many types of "clients" with different objectives and conflicts among them (shareholders, clients, employees, suppliers, community...)

3) Ambiguous system for motivation for the management

4) Ambiguous system for decision making, of responsibility and rewards

Corporate social responsibility, control system, vigilance and punishment from the shareholders point of view

The control system and punishment is built by the market (goods, services and finance), laws and public authorities

Corporate social responsibility, control system, vigilance and punishment from the stakeholders point of view

The company has internal systems of control and punishment, built by a set of objectives of different clients

Philosophy from a shareholders approach

Economic value is the only interest in the firm

Principle from a shareholder approach

The strategy has to create value for a shareholder

Instrument from a shareholder approach

Financial system with quantitative indicators to measure the value creation

Control systems from a shareholder approach

Externalize the control system, vigilance and punishment to the society

Criticism from a shareholder approach

A unique focus toward shareholder could facilitate a short-term vision and fraud.

Philosophy from a stakeholder approach

Conciliate different interest of different groups of interests

Principle from a stakeholder approach

The strategy reaches a consensus of profits for different stakeholders with the objective of the firm's survival

Instrument from a stakeholder approach

Subjective and objective measures with a holistic evaluation for the firm's positioning

Control system from a stakeholder approach

Internalize the complex system, of the society to different levels of organization

Criticism from a stakeholder approach

The internalization of the social loads to the company makes it lose competitiveness in the market


• The ideal for the organization and its future direction
• Short vision statements aimed at hearts and minds
• Vision should be clearly tied to external environment and internal organization of


• Concrete view of the firm’s business, its customers and how it will serve
• Flows from vision
• Should provide direction for strategic action

Value (Philosophy)

Understood as ethical, esthetical, or moral values, which is the object of Axiology studies,
a branch of philosophy. The study of this value is extended to the field of sociology, psychology, cultural…

Value (economics)

An economic concept

Management by Values (MBV)

a concept based on Management by
Instruction (MBI), and Management by Objectives (MBO).


Management by Instructions


Management by Objectives

Characteristics of MBV

- Proposes a theory and methodology to refine the mixture of the shared values as the philosophical essence for business administration.

‐ The flexibility that proposes to facilitate its adaptation in complex and
changing environment.

‐ Integrate different stakeholders and their aligned values, among which the objective of the Company

‐ It measures values and performance in three dimensions: economic,
ethic, and emotional

An integral model of management by values

• Measure economic, ethic, and emotional

• Integrate three levels of organization:
societal, firm, and individual level

• It is about to build sustainability,
innovation, and consciousness

• It generates these competitive
advantages through the capability of
leadership and organizational learning

• The vision of leaders allows a correct
direction of strategy

• The continuous learning constitutes the
adaptive strategy to fight against the
environmental change

Is shareholder a part of stakeholder?


What do financial tools do?

They help control and monitor economic profit/value of the firm, beyond accounting profit.

What can happen if maximization of value is the only objective of the firm?

It could potentially increase fraudulent behavior

Mission and value are...

High level strategic input

Ethical values...

Are important for the firm's strategy and management, besides economic values.