ABSTRACT
This chapter is not really in search of the balanced company. This chapter accepts quite cheerfully (or naively?), without too much thought, that the balanced company is guided or governed by the broad mission and vision of stakeholder value, as opposed to the traditional view in corporate finance of shareholder value. That is, this chapter presumes quite literally that the balanced company's ideal aim is to maximize the joint surplus 1 of stakeholders and to distribute it fairly among them; although formal maximization is not unproblematic, which is discussed below. Rather, this chapter considers and discusses some obstacles related to the concept from the viewpoint of an economist. Balance is in a face-off with one of the major tools in economics, the illustrious idea of equilibrium. The latter is a quality of an economic model regardless of efficiency or fairness, while balance is a quality regarding efficiency, fairness, legitimacy, and other common values of the involved group of actors. The hazard of imbalance occurs whenever two or more economic agents act reciprocally under a regime of conflicting interests. 2 The point is that balance is not an intrinsic, natural solution-concept for an economic model, not like the different equilibrium concepts, which the model designer can apply to conclude his or her work and prove the consistency of the model. This chapter strives to prompt a discussion of the obstacles to balance, as a noun, in economics and business studies and to question its raison d’être. To some extent, and stated quite guardedly, equilibrium is a descriptive concept while balance is a normative concept related to the ethical judgement of an economic equilibrium. The understanding of the balanced company informing this inquiry is grounded in welfare economics.
