**9. Conclusion**

self-same meaning. However, there are some different points that should be noted. The first point is the interpretation over the term "economic performance." Triple bottom lines interpreted "economic" as accounting for the profit of firms, whereas the corporate sustainability concept describes economic performance more broadly than just accounting for the profit of firms in this limiting fashion. The second point of difference is the perception of *value.* While the triple bottom lines separate the value from the environmental and the social by implying that management has to indulge extra activities to enhance economic profit [43], the corporate sustainability theory states that value can be created when resource-suppliers (or stakehold-

The resource-based concept of corporate sustainability fits very well with the overall framework of stakeholders' theory [28, 34–36, 42], which has the main focus of sharing the value created in firms between all stakeholders—not just shareholders. As a consequence of this assumption, we use the terms "corporate sustainability" and "stakeholders" theory interchangeably in this chapter. Practically, it is very difficult to separate the sustainability strategy

Almost all corporations in the contemporary period voice their concerns regarding stakeholder groups beyond the realm of financial stakeholders (shareholders and creditors). Customers, employees, and suppliers are all targets of concerns since they are groups who interact and have a direct influence upon a firm's operation and profitability. More extrinsic stakeholders such as social groups, community groups, or environmental activists are indirectly affected by a firm's operations—but they are also targeted. As indicated in stakeholders' theory, a business's operation in the current business climate cannot be sustained if their stakeholders

Corporate sustainability is not just a new concept in management theory—but the concept has been proposed and discussed by economist for a few decades now. The questions as to why it is needed for current business strategies can be evidenced by many concrete demonstrations and by the work of many academicians. In general, corporate sustainability or stakeholder theory has become the prominent theory because the conventional theory, which emphasizes on a single group of stakeholders or stockholders, is not sufficient to explain the vagaries of the current business climate. Business in this current environment of high and effective internet communication has lowered its wall against outside influences. Their policies or practices are exposed to stakeholders who are more collective in voicing their demand against unjustified policies or unfair policies. There are many business cases which aptly demonstrate how businesses are in a situation of turmoil when stakeholders' welfare requirements are not satisfied. For example, the case of *Nike* in the middle of the 1990s where a transnational was blamed for the use of child labor in Pakistan; in addition, "KFC" has been the target of criticism for its use of trans-fat in its operations. In 2009, *W.R. Grace and Company* the Maryland-based chemical conglomerate had a case filed against if for exposing workers and residents to asbestos contamination in Libby, Troy, and Montana. The case has been the subject of a film entitled "A Civil Action." These cases are all good examples of businesses that

from a policy that is focused on the triple bottom lines theory.

ers) are maximized [43, 61].

14 Firm Value - Theory and Empirical Evidence

**8. Why sustainability?**

are not satisfied.

The developmental learning of firm theory through its history is akin to what Isaac Newton (1675) alluded to when he claimed *If I have seen further it is by standing on the shoulders of Giants*. If we imagine the *theory of firm value* as a ride on a long journey, we can see a lot of changes along the way. Along the journey, the view from one side of the road is clearly different from that on the other side of the road. It moves from one belief in the theory of shareholders to the other side, or the emphasis upon stakeholders. Firm theory has to address these vacillations in financial knowledge. Zingales turns the spotlight onto the future of finance, when he writes that the new theory of finance should understand the relative effects of mergers, acquisitions, spin-offs, and diversification under the aegis of these new theoretical changes. In these new and changing circumstances, the concept of corporate governance must be addressed in order for it to develop a new system to cope with these new market environments [65, 82].
