MGMT 1005H Lecture Notes - Lecture 12: Creating Shared Value, Fiduciary, Invisible Hand
Document Summary
Societal value creation: reconceiving products/markets, redefining productivity in the value chain, building supportive industry clusters at the company"s locations. Do: be profitable, obey the law, be ethical, be a good citizen, carroll. Corporate executive is the agent is to maximize returns to shareholders, duty to act. Law of agency: corporate executive has to think about maximizing return to shareholders. Community engagement is stealing from shareholders, cloak is deception, lying, all about the reasons. Shareholder rights approach: deontological, kantian, no exceptions, must do everything for shareholder. Charity is ok if it is given by individual who owns money. Utility: not wasting corporate funds on charity, more money for shareholders, shareholders can give their own money, better overall economic outcomes. Rights: respecting rights and free choices of shareholders, not deceiving them by cloak of social responsibility, more respect for rights. Markets: rational self-interest promotes overall public interests via invisible hand . Carroll (1991) (davis-1960) social responsibility= beyond firm"s direct economic technical interest.
