The US and UK perception on companies is that the aim of a company (and its management) is to generate profit maximization for its shareholders. Period.
However, the last decade's coporate abuses and scandals have given soil to a 'stakeholder' theory in which the companies are seen as having more goals than simply maximizing profit, and should be accountable for violations of human rights.
Although the German two-tier board system with employee participation is seen as a good stakeholder model, it is also seen as incomplete because it considers stakeholders only employees (and not the community and the environment as well).
Thus, some academics propose that it is impossible to go beyond that because payment (or benefits) provided to non-shareholder stakeholders decrease the pie for shareholders if the profit maximization theory holds and shareholders are entitled to the 'residue'.
So the question is: If the pie is divided too agressively or too much, the incentive of business ventures is reduced or nulified, minimizing the entrepreneurial spirit. If the pie is untouched, it seems social, economic and environmental damages shall keep happening.
Thus: How much it too much? Where is the balance?
its a game, in the sense that there are rules that govern it, and the player does his utmost within the rules to maximise his "score".
no matter how you tweak the rules, the player is only interested in his score. adding social aims onto a capitalist machine is like giving the player a heavy rucksack to carry while he plays
Originally posted by eamon oTrue but you have to have some socialist aims. Education, health etc.
its a game, in the sense that there are rules that govern it, and the player does his utmost within the rules to maximise his "score".
no matter how you tweak the rules, the player is only interested in his score. adding social aims onto a capitalist machine is like giving the player a heavy rucksack to carry while he plays
I believe in low taxes for anything you want to encourage. So corporate and income taxes are things that are best kept small. This is difficult.
Taxes on luxury goods/drugs are already so high that the black market is strong.
100% capitalism is as unrealistic as 100% socialism. We have not got the balance right in so many key areas.
Originally posted by SeitseLooks like simple seitse has been copying stuff he doesn't understand again!
The US and UK perception on companies is that the aim of a company (and its management) is to generate profit maximization for its shareholders. Period.
However, the last decade's coporate abuses and scandals have given soil to a 'stakeholder' theory in which the companies are seen as having more goals than simply maximizing profit, and should be accounta ...[text shortened]... l damages shall keep happening.
Thus: [b]How much it too much? Where is the balance?[/b]
BTW
How many simple seitse's does it take to change a light bulb?
Just one! He holds it up and the whole room revolves around him!
Originally posted by SeitseIn the UK, it is not just a perception that companies should only consider their shareholders' interests. It is a legal requirement.
The US and UK perception on companies is that the aim of a company (and its management) is to generate profit maximization for its shareholders. Period.
However, the last decade's coporate abuses and scandals have given soil to a 'stakeholder' theory in which the companies are seen as having more goals than simply maximizing profit, and should be accounta ...[text shortened]... l damages shall keep happening.
Thus: [b]How much it too much? Where is the balance?[/b]
Originally posted by RedmikeInteresting and surprising.
In the UK, it is not just a perception that companies should only consider their shareholders' interests. It is a legal requirement.
Its funny how directors awarding themselves massive pensions/bonus awards is always in the interests of the shareholders.
Originally posted by SeitseThe market will decide what the right model is.
The US and UK perception on companies is that the aim of a company (and its management) is to generate profit maximization for its shareholders. Period.
However, the last decade's coporate abuses and scandals have given soil to a 'stakeholder' theory in which the companies are seen as having more goals than simply maximizing profit, and should be accounta ...[text shortened]... l damages shall keep happening.
Thus: [b]How much it too much? Where is the balance?[/b]
As for the "good of the people" or "social interests" a business should have, a business shouldn't be forced to have any. Zero. I don't know about the U.K., but in the states, there are still businesses that give to social causes. It happens everyday.
Stability is neccessary to foster charity from business. When you hear about a business that donated to this cause or that, it's almost invariably a very stable business. A company worried about keeping it's doors open doesn't donate much. Another problem here in the states is stability at the top of a company. With CEO's moving from job to job at an ever increasing rate, the modern CEO doesn't have the job stability to be comfortable with giving vast amounts to charities or social projects. This was not as much a problem in decades passed when a "Titan of Industry" could expect to keep his job for decades. When this was the norm, execs did things like build the public library system. Names like Carnegie come out of stability and success, not fear for their job. The most stable and profitable corporate exec in America is Bill Gates. Bill Gates is the current king-daddy of corporate givers, Oprah is certainly no slouch in this area either.
Stable profit is the platform from which corporate execs launch and fund their social programs. Let business be stable and profitable, and you will see an increase of this behavior from these hated topjob types.
What a shame that the same old troll has nothing to add but his/her stupidities.
Merk: As always, man, a thorough view.
I've been reviewing Salomon v. Salomon and not only the lift of the corporate veil has a very interesting approach in the UK, but also marks very clear the other side of the approach to corporate governance.
Originally posted by RedmikeYup, and such is the original aim. Yet, the recent scandals have raised the problem of CSR and it would be intersting to hear from everybody's view where to draw the line between profit maximization and corporate social responsibility.
In the UK, it is not just a perception that companies should only consider their shareholders' interests. It is a legal requirement.
As a Marxist (I am serious here, Mike) what would be your view about it?