Wendy L. Pirie and Michael K. McCuddy
The purpose of this paper is to provide an initial test of the validity of an intertemporal stewardship theory. This theory incorporates stewardship considerations, based on a…
Abstract
Purpose
The purpose of this paper is to provide an initial test of the validity of an intertemporal stewardship theory. This theory incorporates stewardship considerations, based on a foundation of spirituality, as well as financial considerations into financial decision‐making models.
Design/methodology/approach
Contends that successful contemporary companies incorporate both financial and stewardship considerations into their decision making. Fortune magazine's Global Most Admired Companies list was used to define company success. Using Fortune's reputational criteria, companies were differentiated in terms of level of success. Hypotheses were developed about the articulation of and emphasis on financial considerations and stewardship considerations as evidenced by the corporate mission for highly successful vs less successful companies. The hypotheses were tested using paired t‐tests on mission statement data developed for the top‐, middle‐, and bottom‐ranked companies in each of the global industry categories in the 2002 Fortune magazine list. The intent was to determine if hypothesis‐relevant features of the mission statements significantly differed for the companies that were ranked at the top, middle, and bottom of their industries.
Findings
The results of this analysis indicate that organizational success cannot be achieved by focusing primarily on financial or stewardship considerations, but rather company success depends upon emphasizing both financial and stewardship considerations within the context of a clearly articulated mission focus.
Research limitations/implications
The research should be extended to cover more than a one‐year period. This will result not only in a test of validity over time but also a larger sample size.
Practical implications
The practical implications are threefold – for managers and for business professors and researchers. Managers should ensure that mission statements are sufficiently well articulated and focused, and that both financial and stewardship considerations are sufficiently emphasized. Business professors and researchers should use a new paradigm – incorporating both stewardship and financial considerations – for teaching and thinking about business and for conducting meaningful and realistic research.
Originality/value
The preeminence of financial considerations in business decision making is challenged in this article. We find that the most successful companies incorporate stewardship considerations as well as financial considerations into their decision making, at least as it is reflected in their missions. This article provides evidence that decision making can no longer be devoid of stewardship considerations if an organization is to survive and prosper over the long term.
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Steven Graham and Wendy L. Pirie
The fact that stocks going ex‐dividend decline in price by less than the dividend amount is theoretically attributed to the differential taxation of dividend and capital gains or…
Abstract
The fact that stocks going ex‐dividend decline in price by less than the dividend amount is theoretically attributed to the differential taxation of dividend and capital gains or the differential taxation of investor groups. NYSE, Amex and Toronto Stock Exchange listed stocks, and stocks interlisted on these three exchanges, are examined to infer the tax jurisdiction of the marginal investor. The stock price changes relative to the dividends are consistent with a tax clientele effect. Further, the stock price changes are plausible given the tax rates. Ex‐dividend day behavior is different for non‐interlisted stocks on all three exchanges, suggesting each exchange has a different tax clientele. Canadian firms interlisted on US exchanges exhibit ex‐dividend day behavior consistent with the appropriate US exchange’s non‐interlisted stocks, suggesting that the marginal investors in these stocks are American.
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Michael K. McCuddy and Wendy L. Pirie
The purpose of this paper is to develop a theory of intertemporal stewardship that incorporates stewardship, based on a foundation of spirituality, into financial decision‐making…
Abstract
Purpose
The purpose of this paper is to develop a theory of intertemporal stewardship that incorporates stewardship, based on a foundation of spirituality, into financial decision‐making models.
Design/methodology/approach
Argues that stewardship, which shares some common ground with sustainable development, must become an integral component of financial decision‐making. Using agency theory as a point of departure, discusses the Anglo‐American and Continental European‐Japanese models of financial decision‐making, and how they can be reformulated to embrace stewardship and the spiritual foundation upon which stewardship is based. The key to linking spirituality and stewardship is our concept of self‐fullness – the simultaneous pursuit of reasonable self‐interest and reasonable concern for the common good of all human beings. The reformulated model of financial decision‐making is labeled intertemporal stewardship theory.
Findings
The merger of spirituality, stewardship, and financial decision‐making is crucial for the survival and prosperity of businesses and the people they serve. The failure of businesses in the new economy can be traced to the loss of values regarding spirituality and stewardship.
Research limitations/implications
Empirical research must be conducted to test the validity of the proposed intertemporal stewardship theory.
Practical implications
It is essential that managers base their decisions on internalized spiritual and stewardship values that they do not “park at the door” when they arrive at work. Managers should never lose sight of these values, and their decisions should always be grounded in these values. Without such grounding, it is very possible that once again managers will be caught in a cycle of “irrational exuberance”. Therefore, it is critical that these values become not only an integral part of financial decision‐making but also an integral part of education for financial decision‐making.
Originality/value
The financial bottom line is that financial decision‐making can no longer be devoid of spiritual and stewardship considerations if an organization is to survive and prosper over the long term. Neither can business organizations deny spirituality and stewardship considerations if they are to be socially responsible members of society, contributing to and upholding a moral existence for all humanity. In this sense then, the conception of intertemporal stewardship theory that is offered in this paper takes a step toward realizing these greater goals.
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Considers the implications of EMU and the introduction of the euro for European financial institutions and markets. Discusses the likely effects on interest rates, banks…
Abstract
Considers the implications of EMU and the introduction of the euro for European financial institutions and markets. Discusses the likely effects on interest rates, banks, stock/futures exchanges, asset allocation and the markets for bonds, equities and derivatives. Warns that financial markets and institutions must adjust to these changes in order to survive, but believes that European economies will benefit in the long run.
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Kjell Grønhaug and Paul S. Trapp
Social class is assumed to be a crucial determinant in consumer behavior. Most previous research has focused on purchase and consumption behavior across social class segments at…
Abstract
Social class is assumed to be a crucial determinant in consumer behavior. Most previous research has focused on purchase and consumption behavior across social class segments at the generic product class level. In contrast, this article reports an exploratory study on how brands from narrowly defined groups of products and services are perceived to appeal to different social classes.
Kjell Grønhaug and Paul S. Trapp
Social class is assumed to be a crucial determinant in consumer behavior. Most previous research has focused on purchase and consumption behavior across social class segments at…
Abstract
Social class is assumed to be a crucial determinant in consumer behavior. Most previous research has focused on purchase and consumption behavior across social class segments at the generic product class level. In contrast, this article reports an exploratory study on how brands from narrowly defined groups of products and services are perceived to appeal to different social classes.