Nadine Meyer
University of Cape Town
Nadine Meyer is a PhD student at the University of Cape Town, Graduate School of Business, where she holds scholarships with the Allan Gray Centre for Values Based Leadership and the Oppenheimer Memorial Fund. During her MBA, she became acutely aware of the need to integrate conflicting priorities in management decision-making, brought about by increasing complexity and conflicting views of the firm's purpose. This inspired her research about the Principal Priority Paradox (PPP) - the tension between shareholder wealth maximisation and stakeholder interests in decisions that affect the value of the firm. She seeks a better understanding of management decisions in the PPP in order to offer new insights to facilitate better and more sustainable corporate decisions in the future. She presented a paper on the PPP at the 2012 AOM meeting in Boston, USA and is teaching her research to MBA students at the University of Stellenbosch Business School.
The principal priority paradox in management decision making
This paper explores complex management decisions in the tension between conflicting views of the firm's purpose, represented by the shareholder value maximisation view of the firm (Friedman, 1970) and stakeholder theory (Freeman, 1984). This tension is named the Principal Priority Paradox (PPP). The comparative case study explores how executive managers in different functions and industries, perceive the tension between conflicting views of the firm's purpose, how they respond to it, and what influences their response. The study finds that the tension in the PPP is perceived to be largely positive since it compels 'the right' behaviour; that managers identify the firm's purpose and evaluate the PPP differently and that these differences relate to their functions in the firm. Surprisingly, the PPP is found to be a source of creative thinking, due diligence, and innovation.