Shareholders, Stakeholders, And Supply Chains

The April 14 issue of The Economist (www.economist.com) asks whether the twenty-five year (or more) run of the shareholder value model has ultimately failed.  (NB: See Michael Jensen and William Meckling's 1976 "aha!" work, Theory of the Firm.)  This very fine self-styled newspaper goes so far as to quote a ferociously persuasive practitioner of the model, "Neutron Jack" Welch, who, in a possible about-face, recently called shareholder value "the dumbest idea in the world."

Yet another guru, an academic writing in the Harvard Business Review, has called shareholder value a "tragically flawed premise."  As an ardent adherent of the "human face" school of capitalism, I can only applaud signs of a return to a stakeholder value model, in which the interests of employees, suppliers, customers - and, yes, shareholders - are looked after in a balanced way, and with a long-term (i.e., longer than one fiscal quarter) perspective.

Here is the crux of the contest between shareholder and stakeholder value models, in my view.  Can tightly integrated supply chain partners successfully maintain effective business relationships if they are not on the same page of the value-model hymn book?  Further, does insular commitment to a shareholder value model preclude wholehearted participation in a supply chain driven by visions of collaboration, mutual benefit, and sustainable end-to-end performance for ultimate customers?

You may intuit my bias easily enough, but what's your take on the ebb and flow of competing value models?