Stewardship Perspective Research Articles

Another look at education from a Christian stewardship perspective

Despite the current postmodern aversion to large-scale philosophies, another look at Christian stewardship education has become necessary. Christian educators need a reminder in the prevailing socio-political conditions in South Africa about the intricacies of their calling and duties towards the upcoming generation. The article commences with a discussion of education in general and then goes on to argue that the ‘thin’, minimalist and universalist language of modern day secular pedagogical theory should be augmented, or preferably replaced, by the ‘thick’, maximalist and particularist language of education theory rooted in the Bible. The article highlights a number of key concepts associated with Christian stewardship education and concludes by observing that, whilst an entire book (once again) could have been written on the subject, the discussion of a few key issues with regard to Christian stewardship education can serve as a reminder to Christian educators about their pedagogical responsibilities.

The Transaction Cost Economics Theory of the Family Firm: Family–Based Human Asset Specificity and the Bifurcation Bias

We develop a transaction cost economics theory of the family firm, building upon the concepts of family–based asset specificity, bounded rationality, and bounded reliability. We argue that the prosperity and survival of family firms depend on the absence of a dysfunctional bifurcation bias. The bifurcation bias is an expression of bounded reliability, reflected in the de facto asymmetric treatment of family vs. nonfamily assets (especially human assets). We propose that absence of bifurcation bias is critical to fostering reliability in family business functioning. Our study ends the unproductive divide between the agency and stewardship perspectives of the family firm, which offer conflicting accounts of this firm type's functioning. We show that the predictions of the agency and stewardship perspectives can be usefully reconciled when focusing on how family firms address the bifurcation bias or fail to do so.

Internationalization pathways among family‐owned SMEs

PurposeThe purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family‐owned small to medium‐sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family‐owned SMEs.Design/methodology/approachThis paper reports findings from an in‐depth multiple case study with eight Finnish family‐owned SMEs.FindingsThe ownership structure had the most important role in defining the internationalization pathways followed by the family‐owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born‐again global pathways.Practical implicationsFamily entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in addition to their primary co‐operators.Originality/valueThe authors extend the integrative model of small firm internationalization by Bell et al. toward family‐owned SMEs and highlight the most important dimensions in the different internationalization pathways of family SMEs. The ownership dimension is integrated within discussion on differing internationalization pathways. The authors utilize a family business specific perspective (the stewardship perspective), in order to understand the specific features of internationalization among family SMEs, and also how these features differ between family SMEs and other firms.

Economical sustainability of pinestraw raking in slash pine stands in the southeastern United States

Raking pinestraw for use as landscape mulch has gained popularity over the last two decades in the southern U.S. as an intermediate income source for forest landowners, despite uncertainties associated with its long term impact on soil fertility. A Reed model was utilized to ascertain the effects of pinestraw raking on the profitability of slash pine stands. A model that estimates yearly needlefall was employed to determine the nutrient removals due to pinestraw raking. The land expectation value (LEV) for the intensively yearly raked unthinned and thinned stands was $6091ha−1 and $5142ha−1, respectively. Corresponding removals of carbon (C) and nitrogen (N) were 12Mgha−1 and 233kgha−1, and 11Mgha−1 and 182kgha−1 for unthinned and thinned stands, respectively. Stands intensively managed for pinestraw raking were more profitable than those extensively managed, although nutrient removals were greater under the intensive management scenario. Extensively managed and raked stands were more efficient in terms of nutrient removal and economic revenues. From a land stewardship perspective, managing for pinestraw on higher productivity stands may be more efficient in terms of realizing increased economic returns for similar levels of nutrient removal.

Sustainability in the union

AbstractOperating as the center of student life, college unions have a central role to teach citizenship, social responsibility, and leadership. The perspective of stewardship is adopted in this chapter to advance a discussion about college unions as a model for campus sustainability.

Family firms versus leveraged buyouts: a conceptual comparison of distinctive governance structures

PurposeThe purpose of this paper is to compare the governance structures of two distinctive governance forms: the family firm and the leveraged buyout (LBO). The paper also explores the relative performance of these two organizational forms over the course of the economic business cycle.Design/methodology/approachThe paper provides a theoretical treatment of the family firm and the LBO using the stewardship perspective and agency theory. The analysis anticipates the board structure for each organizational form and relates family firm and LBO governance to performance over the business cycle.FindingsFrom a conceptual treatment, the family‐owned concern exhibits board characteristics reflecting the longer‐term orientation of the firm, with boards empowered to include non‐economic, as well as economic, goals. LBOs are structured to maximize shareholder value over a shorter time horizon. LBOs may take advantage of expansionary environments whereas family firms may be better prepared for economic down‐cycles.Research limitations/implicationsThe paper takes a holistic approach to contrasting two organizational forms that fit their respective theoretical frames and compares some of their more salient governance characteristics and performance over the business cycle.Practical implicationsManagers and boards can structure governance to manage the business cycle. Stakeholders can selectively engage firms that portray vital governance characteristics for their benefit and may also pressure boards and top management to make necessary governance improvements.Originality/valueThe paper offers an introductory comparison between family firms and LBOs in terms of governance and managing the firm over the business cycle. This paper makes the case that some organizational forms are better suited to certain types of economic climates.

New Answers and Questions Arising from Corporate Governance Research

New Answers and Questions Arising from Corporate Governance Research

Stewardship or Agency? A Social Embeddedness Reconciliation of Conduct and Performance in Public Family Businesses

Two contradictory perspectives of family business conduct and performance are prominent in the literature. The stewardship perspective argues that family business owners and managers will act as farsighted stewards of their companies, investing generously in the business to enhance value for all stakeholders. By contrast, the agency and behavioral agency perspectives maintain that major family owners, in catering to family self-interest, will underinvest in the firm, avoid risk, and extract resources. This paper argues that both these views have application but under different circumstances, determined in part by the degree to which the firm and its executive actors are embedded within the family and thus identify with its interests. Stewardship behavior will be less common, and agency behavior will be more common the greater the number of family directors, officers, generations, and votes, and the more executives are susceptible to family influence. These findings are supported among Fortune 1000 firms, as well as among the subsample of those firms that are family businesses.

Governing Top Managers: Board Control, Social Categorization, and Their Unintended Influence on Discretionary Behaviors

Manuscript Type: Conceptual Research Question/Issue: This paper seeks to complement agency and stewardship perspectives regarding the governance of top managers by using insights from social categorization theory. Research Findings/Insights: This paper looks inside the black box of the control-performance relationship. We acknowledge that boards can positively influence organizational functioning by monitoring the top management team. However, we also argue that board control contains a hidden cost. The model we develop describes how control can highlight the distinction between principals and agents thereby causing the top management team to adopt a biased and less cooperative “us vs. them” orientation towards owners and their representatives. We contend this results in an increase in negative discretionary behavior and a decrease in positive discretionary behavior, which dampen the positive influence of control on firm performance. We also describe techniques for mitigating this unintended outcome of control. Theoretical/Academic Implications: Agency and stewardship theories offer alternative views of human nature and provide divergent prescriptions for governance. This paper presents social categorization theory as a complementary lens emphasizing a situational and social view of human nature that helps explain top managers' discretionary behaviors that influence firm performance. Practitioner/Policy Implications: Ongoing governance scandals are costly illustrations of unchecked managerial opportunism. They demonstrate the need for vigilant control. A control approach to governance, however, does not consistently improve firm performance. This paper offers an explanation. It acknowledges that board control is necessary, while arguing that it can have unwanted side effects. We describe two tools (individualization and social recategorization) that can be used to ameliorate these effects.

Exploring the Entrepreneurial Behavior of Family Firms: Does the Stewardship Perspective Explain Differences?

Drawing from stewardship theory, we investigated corporate entrepreneurship in family firms. We argued that stewardship culture determinants––comprehensive strategic decision making, participative governance, long–term orientation, and human capital––differentiate the most entrepreneurial family firms. Based on a study of 179 family firms, we showed that comprehensive strategic decision making and long–term orientation contribute to corporate entrepreneurship. Additionally, family–to–firm unity enhanced the positive effects participative governance and long–term orientation have on corporate entrepreneurship. While we found that family–to–firm unity can compensate for low human capital, unexpectedly, we also found that family–to–firm unity can dampen the positive relationship between human capital and corporate entrepreneurship.

Measures of Value in Acquisitions: Family Versus Nonfamily Firms

This article sheds light on the valuation of family firms when compared with nonfamily firms as acquisition targets. The authors argue that although the majority of theoretical and empirical research explicitly recognizes the prevalence and superior performance of family firms around the world, acquiring companies tend to regard family firms as unprofessional and inefficient organizations, thus negatively affecting their valuation when compared with nonfamily firm targets. Overall, the authors’ empirical analysis, based on a matched-pairs methodology and use of multiples, shows that acquiring companies favor the stagnation perspective rather than the stewardship perspective and thus pay less (i.e., acquire at a discount) for a family firm target than for a nonfamily firm target.

A Leadership Perspective of Reciprocal Stewardship in Family Firms

Davis, Allen, and Hayes found that family members employed by the family firm reported significantly higher levels of perceived stewardship than nonfamily members. We extend their research by exploring how stewardship in family firms can be further expanded throughout the firm using the theoretical perspective of leader–member exchange (LMX) theory. Particularly in family firms, the leader's stewardship behaviors may establish a culture of stewardship throughout the firm. The resulting reciprocal stewardship behaviors of employees can be explained through LMX mechanisms. Propositions are offered to explore conditions where the family firm context provides a unique opportunity for creating a culture of reciprocal stewardship.

Soft information and the stewardship value of accounting disclosure

In light of IASB’s statement to drop stewardship as a separate objective of financial accounting and the ongoing debate about increasing the disclosure of soft information, we investigate the economic consequences of publicly reported soft information from a stewardship perspective. In an LEN model we include market price as a performance measure and investigate whether the principal benefits from disclosing additional information. While the principal can only use contractible performance measures in the contract with the agent, capital market participants can only use disclosed information when pricing firm value. We find that the disclosure of information can decrease the principal’s expected net profit. This result follows from either a noisier or a less congruent market price as a consequence of disclosing additional information. Thus, we present a rationale for partial disclosure in the absence of proprietary costs or the uncertainty of information endowment.

Is Family Business Beautiful? Evidence from Italian Stock Market

From the agency perspective, literature studying links between investor protection and governance profiles argues that family is more disposed than other shareholders to divert private benefits in countries with a poor legal framework: the question is empirically puzzling. From the stewardship perspective, the degree of familiness affects the stewardship attitude of the firm. We do not find that family firms perform worse or better than non-family counterparts. Some evidence is found as regards the entrenchment effect: family CEOs seem to weaken firm performance. Stewardship attitude – not familiness – does matter: moderate levels of stewardship improve performance and increase risk-taking.

Is family business beautiful? Evidence from Italian stock market

From the agency perspective, literature studying links between investor protection and governance profiles argues that family is more disposed than other shareholders to divert private benefits in countries with a poor legal framework: the question is empirically puzzling. From the stewardship perspective, the degree of familiness affects the stewardship attitude of the firm. We do not find that family firms perform worse or better than non-family counterparts. Some evidence is found as regards the entrenchment effect: family CEOs seem to weaken firm performance. Stewardship attitude – not familiness – does matter: moderate levels of stewardship improve performance and increase risk-taking.

The Voluntary Adoption of Internationally Recognized Accounting Standards and Firm Internal Performance Evaluation

ABSTRACT: A large body of research is devoted to understanding the causes and consequences of firms' adoption of internationally recognized accounting standards. Thus far, researchers' attention has focused almost exclusively on the informational benefits of the adoption. We extend the existing literature by offering a different, stewardship perspective. We hypothesize that the voluntary adoption of international accounting standards is associated with changes in the firm's internal performance evaluation process; in particular, it is associated with increases in the sensitivities of CEO turnover and employee layoffs to accounting earnings. Our results are consistent with these predictions.

Benchmarking the fundraising performance of UK charities

Abstract The cost of fundraising and its effectiveness are issues of increasing importance in the UK nonprofit sector. Measuring fundraising effectiveness properly is critical to organisations on two fronts. From a financial stewardship perspective, charities need to ensure that their fundraising is as efficient as possible. From a public relations perspective they need to be able to demonstrate this to donors and our other stakeholders. There are many problems to be overcome in objectively judging a charity's performance relative to other nonprofit organisations. There are significant methodological barriers to be overcome to produce valid and meaningful comparisons. The well established Fundratios study shows that it is feasible to construct a methodology for robust benchmarking underpinned by good quality data which charities can use as a tool to inform the management of their fundraising activities. Copyright © 2009 John Wiley & Sons, Ltd.

Soft Information and the Stewardship Value of Accounting Disclosure

In the light of IASB's statement to drop stewardship as a separate objective of financial accounting and the ongoing debate about increasing the disclosure of soft information, we investigate the economic consequences of publicly reported soft information from a stewardship perspective. In a LEN model we include market price as a performance measure and investigate whether the principal benefits from disclosing additional information. While the principal can only use contractible performance measures in the contract with the agent, capital market participants can only use disclosed information when pricing firm value. We find that the disclosure of information can decrease the principal's expected net profit. This result follows from either a noisier or a less congruent market price as a consequence of disclosing additional information. Thus, we present a rationale for partial disclosure in the absence of proprietary costs or the uncertainty of information endowment.

The Voluntary Adoption of Internationally Recognized Accounting Standards and Firm Internal Performance Evaluation

A large body of research is devoted to understanding the causes and consequences of firms' adoption of international accounting standards. Thus far, researchers' attention has focused almost exclusively on the informational benefits of the adoption. We extend the existing literature by offering a different, stewardship perspective. We hypothesize that the voluntary adoption of international accounting standards is associated with changes in the firm internal performance evaluation process; in particular, it is associated with increases in the sensitivities of CEO turnover and employee layoffs to accounting earnings. Our results are consistent with these predictions.

Vergrijzing, levensfasebeleid en de cao

Ageing, life cycle management and collective labour agreements Ageing, life cycle management and collective labour agreements Solutions for issues with respect to ageing are often searched for in Collective Labour Agreements (CLA). This article investigates the necessary conditions for concluding arrangements for ageing in a CLA. First the influence of government on the degrees of freedom of social partners is explored from the viewpoint of institutional economics. Next, the theoretical conditions are mapped that negotiating parties in companies can develop themselves, from the perspective of transaction costs, agency or stewardship. The various approaches are illustrated with some facts about Dutch CLAs. It appears that the management of individual life cycles is more appropriate as a concept than the issue of ageing. In a survey of 564 Dutch CLAs the aspects of a life cycle approach are listed. In the discussion the limitations of the present analysis are reviewed, the conditions are summarized, possibilities for further research are indicated. The conclusion is that under certain conditions the CLA can contribute to the management of one’s life course.