Measuring Corporate Performance by Building on the Stakeholders Model of Business Ethics

Abstract

The main thesis guiding the conceptual development of our corporate performance measurement model is that business success – defined as long-term survival and growth – is determined by relationship quality (1) among the various organizational departments (internal stakeholders), (2) between internal and external stakeholders, and (3) between internal and distal stakeholders. Relationship quality among internal stakeholders is conceptualized and operationalized in terms ofinternal service quality. Relationship quality between internal and external stakeholders is conceptualized and operationalized in terms ofexternal service quality. Relationship quality between internal and distal stakeholders is conceptualized and operationalized in terms ofcompany goodwill. Thus, corporate performance of manufacturing firms can be measured by a survey of representatives of internal, external, and distal stakeholders. Corporate strategies can be developed as a direct function of strengths and weaknesses uncovered by corporate performance measurement.