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Lecture 3 Role of Corps 2013

3 92213 view 2 on the role of corpora0ons in society

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Unformatted text preview: corpora0on. •  Some0mes shortened to maximise profit. •  Defended by Milton Friedman in famous 1970 ar0cle. •  Constraints: law, ethical custom and ‘the rules of the game’ (free markets). •  Can be defended on private property grounds, or social u0lity grounds. •  Corporate task is to create wealth and innovate based on consumer choice. •  Past couple of decades interpreted as maximise shareholder value. •  Which confuses ‘real’ value of corpora0on with expecta0ons. 3 9/22/13 View #2 on the role of corpora0ons in society. •  CSR movement, stakeholder theory. •  Corpora0ons ought to be run in a socially responsible way. •  It is up to senior management (and B of D, shareholders) to ensure this. •  Some argue that corpora0ons can make money from this – called ‘instrumental stakeholder (or CSR) theory’ •  e.g. Green companies, The Body Shop, Bojom of the pyrami...
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