
A
short spot on NPR the other day caught my ear, on what the industry is beginning to call
Benefit Corporations. The reporter launched the report with the pithy,
A corporation generally exists for one reason: to make money.
Whenever I hear this summary of what corporations are for (and it seems to be the dominant concept), I wonder, "Is that true? Are corporations just money-making entities?
I'll come back around to this in a bit, for now I'd like to suggest that corporations exist not to make money per se, but to create a valuable product the sale of which will be profitable. That's a distinction with a difference. Most corporations I respect are driven by and inspired by their product, and only secondarily by their profit-margins. And corporations that take pride in their product are often profitable.
Profits and "doing good" are not mutually exclusive events. ALL for-profit AND not for profit businesses MUST be profitable ("Not for profit" is an oxymoron in my opinion) to survive. There is constant tension between "more profits" and "more benefits" but that's life. Another example of tension is "too much profit," what is "too much?"
ReplyDeleteAnyway, I think this article: http://www.econlib.org/library/Enc/Corporations.html helps clarify the definition of a corporation. With this article in mind, I'm not sure how you could retain the value for the investors (stock holders = owners) without being profitable.
Steve
A Presbyterian church a place of people's hope and welfare. These churches are playing important role on the society also. being Presbyterian also encompasses a particular theological outlook.
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