A preliminary test of the validity of a proposed intertemporal stewardship theory

Abstract

PurposeThe 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/approachContends 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.FindingsThe 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/implicationsThe 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 implicationsThe 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/valueThe 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.