Value creation and appropriation in economic, social, and environmental domains: Recognizing and resolving the institutionalized asymmetries

Value creation and appropriation are much-studied processes in business and management fields. However, both academia and business practice have traditionally focused on how value is created and appropriated in the economic context and by economic actors. This overemphasis on economic logic has created institutionalized asymmetries in managing the relationship between business, society and ecological environment. In this paper, we broaden the value creation and appropriation analysis along two dimensions: (1) the type of economic goods used to create value (private and club goods, public goods and common goods) and (2) value creation and appropriation domains (economic, social, and environmental). Building on this framework, we argue that there are several institutionalized asymmetries in the relationship between the goods used to create value and the domains in which the value is eventually appropriated. We point out the system-level tendency of value over-appropriation in the economic domain over the two other domains as well as value over-appropriation in the social domain over the environmental domain. We also discuss how existing organizational practices, such as corporate social responsibility, shared value creation, and sustainable business models, have attempted to over come them, and reflect on the main critiques to these approaches. Finally, we identify potential business based solutions to the institutionalized asymmetries and provide implications to research and practice. (c) 2021 Elsevier Ltd. All rights reserved.

Automated summary

Value creation and appropriation have been studied extensively in the fields of business and management, focusing largely on economic contexts. This has led to asymmetries in managing the relationship between business, society, and the environment. There is a tendency for over-appropriation of value in the economic domain compared to social and environmental domains, as well as in the social domain compared to the environmental domain. Existing organizational practices like corporate social responsibility and sustainable business models aim to address these asymmetries, but face criticism and challenges.