Accounting for Business Models: Increasing the Visibility of Stakeholders

Colin Haslam, Nick Tsitsianis, Tord Andersson, Pauline Gleadle

Abstract


Purpose: This paper conceptualises a firm’s business model employing stakeholder theory as a central organising element to help inform the purpose and objective(s) of business model financial reporting and disclosure.

Framework: Firms interact with a complex network of primary and secondary stakeholders to secure the value proposition of a firm’s business model. This value proposition is itself a complex amalgam of value creating, value capturing and value manipulating arrangements with stakeholders. From a financial accounting perspective the purpose of the value proposition for a firm’s business model is to sustain liquidity and solvency as a going concern.

Findings: This article argues that stakeholder relations impact upon the financial viability of a firm’s business model value proposition. However current financial reporting by function of expenses and the central organising objectives of the accounting conceptual framework conceal firm-stakeholder relations and their impact on reported financials.

Practical implications: The practical implication of our paper is that ‘Business Model’ financial reporting would require a reorientation in the accounting conceptual framework that defines the objectives and purpose of financial reporting. This reorientation would involve  reporting about stakeholder relations and their impact on a firms financials not simply reporting financial information to ‘investors’.

Social Implications: Business model financial reporting has the potential to be stakeholder inclusive because the numbers and narratives reported by firms in their annual financial statements will increase the visibility of stakeholder relations and how these are being managed.

What is original/value of paper: This paper’s original perspective is that it argues that a firm’s business model is structured out of stakeholder relations. It presents the firm’s value proposition as the product of value creating, capturing and manipulating firm-stakeholder relationships. The originality of this paper is that it calls into question the nature of the accounting conceptual framework. Business model financial reporting will involve reporting about material stakeholder relationships and how these impact upon the viability of a firm’s business model value proposition.


Keywords


business model, stakeholder theory, value creation, value capture, conceptual framework and accounting disclosure

Full Text:

PDF


DOI: http://dx.doi.org/10.5278/ojs.jbm.v3i1.1066

Refbacks

  • There are currently no refbacks.