One of the first lessons in economics 101 in regards to the theory of the firm speaks like a mantra. The professor asks, "What is the purpose of the firm?" The reply without thought is a resounding, "To maximize shareholder value". In reality, however, this service to the shareholder presents many well studied principle agent problems. Managers are tempted to inflate earnings or deflate costs in a myriad of accounting witchcraft. Likewise, shareholders don't necessarily hold the firms best interest in mind as well. They are likewise interested in short term gains to push up their equity returns. So it begs the question, why do we gather in this thing called the firm? To what do we owe our efforts?
We find commonly that the daily humdrum employee thinks nothing of the shareholder and everything about their manager; quite possibly there is too much regard for their manager. Personal performance is self-judged by their manager's reaction. And so there is this chain of performance self-judgement up the chain of the corporate command. There is no effort to maximize shareholder value. The effort typically is to please the boss and nothing more. Such individuals value the job rather than the product or service. They tend to be less collaborative and less willing to innovate in ways that might fear the security of their job. Such tendencies are common in cost centers.
To what value, therefore, should we strive? If maximizing shareholder value leads to all the manifold principle agent problems we face, to whom shall we measure value? Some would answer that it is value to the customer toward whom we should strive. But does the customer necessarily know what is valuable? In fact this is the power of many brands that attract such a customer following. The customer covets but doesn't know why. They are drawn to the brand's mystique. There is something about all of the product or service's emergent properties that almost cannot be put into words. All that to say - the customer isn't rationale.
All of these prior attempts of value pursuits strive for what I might humbly submit is relative value. They are coupled by the estimation of an individual or setting. The value of an output is dependent on their existence. Our efforts to maximize shareholder value depends on the existence of the shareholder. Our efforts to maximize customer value, depend on characteristics of a customer that are prone to change.
A value to which we should strive is an absolute value. This value deems the product or service intrinsically valuable. It is valuable no matter who or at what age or time esteems it. It doesn't depend on who consumes or uses it for other production efforts. It is customizable and flexible. Over time consumers find new ways of using it and innovating from it. While such value is almost impossible to achieve, it is something one should strive.