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Cake day: June 7th, 2023

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  • Specifically, the Board and thus the CEO must maximize company VALUE not profit.

    There are other ways to increase company value that do not necessarily result in Q/Q / Y/Y profit increases.

    But in the 1970s you get a guy named Milton Friedman who comes along with the concept of shareholder value in a 1970 essay for The New York Times, entitled “A Friedman Doctrine: The Social Responsibility of Business Is to Increase Its Profits”.[5] In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders.

    So there’s been a lot of argument against it since esp as of late, but the economic hegemony still adheres to Friedman’s economic principles.