This chapter proposes an enriched analysis of value creation seeking to integrate all the stakeholders. To this end, they suggest two practices that counterbalance the power of shareholders and managers by allowing other stakeholders to exercise political and financial power. They are interested in employee share ownership and customer shareholding. In fact, the property grants customers and employees the superior status of the shareholder in order to enjoy a higher power likely to limit the attempts of managerial entrenchment and shareholder supremacy.
TopFrom Shareholder Value To Partnership Value: A Paradigm Shift
Governance is concerned with the architecture and the exercise of power within companies, two great opposing visions coexist. The first, provides a monistic description of power called shareholder value, the second presents a pluralistic vision allowing the integration of all stakeholders in the process of value creation called, then, the partnership value.
Our work proposes a new reading grid of partnership creation of value by focusing on employee share ownership and customer share ownership.
Ownership, provided by these two managerial practices, provides additional power to the two targeted stakeholders in order to limit the managerial entrenchment and the dictatorship of external shareholders.
The preponderance of shareholder value emerged under the Anglo-Saxon influence which gives a decisive role to the financial markets.
In addition to this institutional reason, shareholder value finds another justification in traditional financial theory; this theory considers shareholders as the only residual creditors of the company (Charreaux & Desbrières 1997).
Thus, the configurations of corporate governance systems that exist are those that maximize the wealth of shareholders. The only concern of the executives is then maximizing dividends to pay the shareholders more and better. This situation undermines the interests of other stakeholders who are confined to serving the shareholder vision. Employees and shareholders are sacrificed for the creation of wealth distributed to shareholders.