The Pros And Cons Of Corporations

Today, it is generally perceived by the public that the single and sole objective of corporations is to maximize profits (Bartlett, 2015), reflected in President Bill Clinton’s radio address in 1996 during which he stated “the most fundamental responsibility for any business is to make a profit”. This belief could be substantiated by the statistic that the profit margins of American corporations have risen from the 1980s to 2008 (Blodget, 2012), shown by the increase in nominal GDP of the United States over the period (Yardeni, Johnson, 2016). Given the above, it could be deduced that most businesses do indeed have a single objective of profit maximization and therefore tend to pursue short-term gains at the expense of all other considerations.

This is elaborated in The Corporation, where Joel Baken (2005, p.56) suggests that corporations are evil and pathological institutions due to the fact that managers are inherently righteous people with good intentions but, when in the context of business, will act in what would otherwise be deemed outside of their private lives in a psychopathic

The term, in other words, point out that capitalism could be a key driver for both social and economic good (Schwartz, 2013). Corporations practicing conscious capitalism are stakeholder-oriented, led by “values-based leaders” who come across more as a servant than a celebrity, and, although they do continue to view profitability as necessary and desirable, do not pursue these short-term gains at the expense of all other considerations (O’Toole, Vogel, 2011). An example of this in practice would be Container Store who pays their full-time sales employees nearly twice as much the industry average (Schwartz,