BSM 600 Chapter Notes - Chapter 10: Profit Maximization, Mci Inc., Triple Bottom Line
Document Summary
Collapse of financial institutions eg lehman brothers had wider impact around the world. Economic crisis not main cause of turbulence - just highlighted complex econ/social/ecological changes that, over time, significantly altered biz env. Seeds of crisis from 1990s on, e. g. after dot com bubble - banks wanted more. Light regulation attractive returns than from traditional investments, so found new ways of making money, e. g. from cdos. Downside of aggressive pursuit of shareholder value through financial engineering and high-powered management incentives. 9/11, invasions, bombings, arab spring, isis: global social upheaval and ecological concern. Shift in economic power from west to east. Ecological state: tipping point of climate change. Economic, ecological, and social instability create societal pressures for change. Social legitimacy: for orgs to survive, must adapt to values/expectations of society, retain social legitimacy. Legitimacy of particular type of biz, acceptance among consumers, willingness of investors and financiers to provide funding, govt support. Must add to strategy: corporate responsibility and sustainability.