Managing corporate impacts: co‐creating value By J. J. Griffin. Cambridge University Press, Cambridge UK, 2016. ISBN: 9781316484944.

• Date: 01 February 2017
• Author: Geoff Allen
• DOI: http://doi.org/10.1002/pa.1633
• Published date: 01 February 2017

BOOK REVIEW

MANAGING CORPORATE IMPACTS:

CO‐CREATING VALUE

By J. J. Griffin

Cambridge University Press, Cambridge UK, 2016. ISBN: 9781316484944.

Thebook is in the series, Business, Value Creation, and Society,edited by R. Edward

Freeman, University of Virginia, Jeremy Moon and Mette Morsing, Copenhagen

Business School.

1|MANAGING CORPORATE IMPACTS; A

BUSINESS PERSPECTIVE

Some corporate leaders, under pressure to provide returns to inves-

tors, could see this book as yet another attempt by a well meaning

academic to distract them from their core business purpose.

It may trigger reflection on the old debate over what society

expects of a firm.

Griffin cites Milton Friedman’s classical 1970s capitalist proposi-

tion “business of business is business”with the responsibility to make

profits without fraud or deception.

Yet, based on observations of business practice around the globe,

the world, and the business world has changed since the 1970s. She

uses Friedman’s“business of business is only business”mantra as a

counterpoint to her proposition of cocreating value with myriad stake-

holders. No doubt Friedman meant to be interpreted as narrowly as

Griffin implies when he said companies had no other purpose than to

maximize profits for the owners of capital within the law.

This was in 1970, an environment in which there was a strong

reaction to the managerial theory that postulated company managers

doing only enough to keep shareholders happy while pursuing their

own interests and shadowed by community resentment at corporate

power in the “Great Society”urban renewal and school adoption

programs of the 1960s.

Many in business see stakeholder demands as essentially political,

intrusive, and negative to the mission of business. Stressing the role of

nongovernment organizations, David Henderson CMG, former chief

economist at the OECD, claimed that responding to expectations they

create (referring specifically to “corporate social responsibility”)

reflects appeasement, or at least collaboration with opponents of the

private enterprise system.

An outcome that reflects business concessions to nongovernment

organization‐driven expectations, “confers on businesses and NGOs

alike a status which they have no rightful claim to, since they are

neither elected nor politically accountable”(Henderson, 2002).

Griffin’s book is tonally closer to the 1960s concept of the multiple

objective corporation, where owners expectations are ranked along

side, but not before, other stakeholder expectations.

A more recent version is that of Post, Preston, and Sachs who,

based on their observations of corporate practice, redefine the corpo-

ration from “…the currently prominent ‘ownership’model that places

primary emphasis on the private interests of investors …. The modern

corporation is the centre of a network of independent interests and

constituents, each contributing (voluntarily or involuntarily) to its per-

formance …”(Post, Preston, & Sachs, 2016, p. 8).

They go on to say,

“…share owners hold securities, but they do not own

the corporation in any meaningful sense, nor are they

the only constituents vital to its existence and

success …. This leads the authors to place

shareholders in line with other ‘stakeholders’…”(Post

et al., 2002, p. 11).

There are some important cultural differences in corporate socie-

tal engagement with stakeholders across the Atlantic. Business ideol-

ogy in a more corporatist Europe (as in much of Asia) is inclined to

place the company as an integrated actor squarely located within the

social and political fabric. American ideology lays greater stress on sep-

aration from government, individualism, and the rights of private prop-

erty. It is instructive to note, for example, in the rhetoric of external

engagement, the American emphasis of citizen obligation, to “give

back”compared to European emphasis on community rights and gov-

ernment harmonization for a triple bottom line and sustainability.

But there has been a conversion of practice, and for many years,

western companies have operated on the basis of “enlightened self

interest”that does the job of reconciling the classical shareholder

theory of the firm with ethical and reasonable social expectations.

For example, an Australian survey of the top 150 companies as far

back as 2007 found that 93% of respondents had a business case for

their corporate community investment and 24% with specific return

on investment justification (Australian Centre for Corporate Public

Affairs, 2007, p. 34).

(This, plus the long history of bottom line‐driven engagement of

European companies in corporatist partnerships with community

actors, led to some puzzlement at the breathless reception of the

“shared value”insights of Porter and Kramer over the past decade!)

Thebusiness readerwillcometo seethatdespite theemphasisoncre-

ating value with a multiplicity of stakeholders, aligned with enlightened

self interest, rather than the multiple objective model, appearsto be the

underlining premise of Griffin’s book. She sees a positive link between

serving stakeholder needs and hard‐nosed, disciplined, strategic, busi-

nesscalculus, providing win‐wins in the short, medium, and long term.

DOI 10.1002/pa.1633

J Public Affairs. 2017;17:e1633. Copyright © 2017 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of2

https://doi.org/10.1002/pa.1633