Electronic Resource

Article - The dark side of shareholder orientation: A reflection of Rappaport’s concept of shareholder value Vol. 22, No. 2 Nomor Artikel: e2379

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The concept of shareholder value has been the subject of heated debate for 40 years.
Surprisingly, the literature seems to overlook the fact that shareholder orientation by
management is something completely different from the implementation of this idea

in the well-known shareholder value concept, which aims to measure the contribu-
tion of management to shareholder welfare. Using a market-oriented framework, this

study shows that the fundamental orientation of shareholders' subjective preferences
is supported by a property rights perspective inspired by the ideas of the Austrian
School of Economics. In contrast, Alfred Rappaport's shareholder value concept is

based on neoclassical equilibrium thinking and, therefore, counteracts the real, imper-
fect environment of the corporation's decision-makers, especially their subjective

values. This results from individual preferences and decision parameters, as well as
incomplete and asymmetric information. Thus, it ignores the reality of managerial
decision-making. Based on these considerations, we argue that the advocacy of a
general managerial orientation toward shareholders' objectives does not logically
imply full support for the implementation of the idea under Rappaport's concept. In

doing so, this essay contributes to a more differentiated discussion on valuation, cor-
porate governance, and managerial decisions.

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Ketersediaan

Informasi Detail

Judul Seri

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No. Panggil

658.15 FOL d

Penerbit

: John Wiley & Sons, Ltd., 2020

Deskripsi Fisik

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Bahasa

English

ISBN/ISSN

1479-1854

Klasifikasi

658.15

Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

Vol. 22, No. 2 Nomor Artikel: e2379

Subjek

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Info Detail Spesifik

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Pernyataan Tanggungjawab

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