Organizations & Work
The Shareholder Value Principle: The Governance and Control of Corporations in the United States
Version of Record online: 25 OCT 2013
© 2013 Blackwell Publishing Ltd.
Volume 7, Issue 10, pages 829–840, October 2013
How to Cite
Shin, T. (2013), The Shareholder Value Principle: The Governance and Control of Corporations in the United States. Sociology Compass, 7: 829–840. doi: 10.1111/soc4.12076
- Issue online: 25 OCT 2013
- Version of Record online: 25 OCT 2013
In recent decades, maximization of shareholder value has been a dominant business principle in the United States. This article reviews sociological accounts about the emergence, diffusion, and reality of the shareholder value principle. Although mainstream research in law and economics on corporate governance embraces the shareholder value principle and provides theoretical justifications for it, sociologists consider the shareholder value principle to be a product of specific economic, political, and ideological environments. Based on sociological research that reveals normative and political foundations of the shareholder value principle, I argue that the shareholder value principle is far from hegemonic in the contemporary United States. Indeed, faced with shareholder primacy, corporations and top executives have adopted various strategies, such as perfunctory conformity and symbolic acquiescence. The result is a highly volatile and contested system of corporate governance today.