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The Contracts Model, although more complete in its representation of the firm, is the most complex because it doesn’t identify which stakeholders are most important or which obligations should come first, second, etc. It often takes an official body such as a court of law to determine not only the implicit obligations between a corporation and a secondary stakeholder but the degree to which the firm is obligated.
What’s important is to recognize that more complete models are, by nature, more complex and take into account too much information so that what’s important is difficult to assess. The principal-agent relationship states that managers act in the best interest of the stockholders. But must the stockholder interests be secured before secondary stakeholder obligations are met? And if stockholder interests are never fully met, when will implicit obligations be attended to?
The Contracts Model is superior to the Investment-Vehicle model because it identifies more stakeholders than just those with whom a corporation has explicit obligations. It is superior to The Accounting Model because it takes into account multiple stakeholders in real time rather than from a snapshot in time. However, with completeness comes complexity and an unending maze of identifying and satisfying many stakeholders, some far removed from the corporation.
