Should corporations only worry about the bottom line, or should they be encouraged to look at the big picture?

Answer 1

In business in a capitalistic situation there is only "the bottom line".

Answer 2

Legally, the board of directors is obligated to maximize shareholder value. You can look at this from the perspective of Adam Smith or you can look at some refinements of game theory that indicate that cooperation leads to better outcomes.

My experience with large corporations has been that those corporations that look after customers, employees, vendors, as well as the investors generally have the best growth in shareholder value.

As a consumer, I'd prefer to deal with an ethical company that looks at the big picture and is willing to help local and international communities that they serve. Bill and Melinda Gates are shining examples of entrepreneurs who have an awareness of the big picture.

Unfortunately, many companies are run into the ground by high-flying and self-serving executives (Enron) who optimize their personal wealth at the expense of everyone else.

We need to reform how corporations are managed and look at the ideas presented by E.F. Schumaker who describes a better way to organize work. His book, Small is Beautiful, is a classic, but my personal favorite is: A Guide for the Perplexed.

Thanks for the good question. I think that corporate board members need to be more responsible in holding top executives accountable for the long-term. They need to stop focusing on short-term profits. To repeat myself: their focus should be long-term.

Answer 3

Would you believe that by law they must look at the bottomline. This goes back to a landmark case way backin the early part of 20th century. I am not that good at memerizing dates, however the approximate timeline you can probably figure out.
As Henery Ford was mass producing his cars, he relied on 2 companies Dodge and Cheverlette for many of his parts like brakes, assorted nuts and bolts and tuthfully I do not remember every little thing. I do remember both companies were doing well and were the life blood of the Ford Motor Company. At some point Dodge & Chev.decided to strike out in the car business for themselves. When Henery got word of this he lowered the price of his cars so cheap it is rumoured he was likely selling at a breakeven or a fraction profit.Some say loss. This effectifly dashed all hopes for Dodge /Chev. and as all good Americans, they sued. Ford claimed he was making such unexpected huge profits he felt compelled to lower the price to allow the mass working classes a chance to own a car. Dodge countered he did not believe Ford had any altruismin mind and he wanted tomaintain a monopoly.
The court decetion came down assuch; The said Henery Ford had no right to lower the prices of cars for the masses because he did not answer to the masses. His job was to make profits for the shareholders, Altruism has absolotely noplace in business. To this day many companies and corporations site this precident when enraged consumers sometimes file siut of price gouging. They sometimes win, dispite this law, but the party involved has to pull an Enron or something...Mary

Answer 4

If they want less restrictions by the government they should take into account the big picture. The way it usually works though is that corporations basically say that they can be trusted to do the right thing without the government's interference, and it turns out that isn't the case.
One way or another, they have got to be held in check. Either through their own conscious or through the law. Corporations can do alot of damage to the environment, workers rights, politically, and to the economy in general. Who will keep them under control ?

Answer 5

Corporations jobs are to MAKE money...nothing more nothing less....they pay their taxes and employ people...as far as the "big picture" They run the risk of hurting the bottom line...and not all companies will get bailed out if they fail... by the Gov. The better the Companies do the more they employ...that is better for the US..that is the BIG PICTURE...
Taxing them to death kills the US....They make Charitable donations to get good will with the people..but at their availability....Sorry there but it is the BOTTOM LINE THEY NEED TO WATCH....

Answer 6

well... the thing is... they often seem to be the same in the long run... but businesses are trying to maximize THIS QUARTER'S profits, often at the expense of next quarters...

the problem with the "invisible hand" is when people stop caring about long term benifits over short term benifits... cahsing out now and "who cares" about the effects down the road...

basically, capitalism falls appart when business morals fall appart...

and you have so many businesses doing the "bad things" people start assuming all businesses are like that and not "demanding more" out of businesses or even shopping around for businesses that don't have poor practices, since it seems so many do...

so competition is cut down, due to the fact that it seems no one cares...

Answer 7

Personnally I beleive that everyone who has more than they need should be "encouraged to look at the big picture". The real question at hand here should be: When does success turn into greed?

Answer 8

the big picture is the bottom line...same as our government and everyone elses

Answer 9

It will vary. A corp. that makes with little waste need not be that concerned, but a major polluter should be.

Answer 10

isn't capitalism great!! they treat people like cattle,then when they are done with you they dispose of you.encouraged?should be forced if you ask me!!