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An alternative view of the role of the corporation in society
Do corporations do well by doing good? Or do firms that engage in environmental and social initiatives destroy shareholder wealth? George Serafeim, the Jakurski Family Associate Professor of Business Administration, has studied how increasing the concentration of economic activity and power in the world’s largest corporations has created an opportunity for managers to consider the interests of a broader set of stakeholders.
The role of the corporation in society can be a function of the larger economic, social, and political context, and as a result can evolve over time, observes Serafeim. “In addition, corporations are not a homogenous group, as the theories of profit maximization assume; not all corporations have the same role in society, and many of the largest corporations have more of their activities put to the test of public interest,” says Serafeim. With this understanding comes a need for additional research on topics such as sustainability metrics, how executives design incentive and control systems, and how companies report their performance and position.
(Published May 2015)
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