How great companies deliver both purpose and profit

Edmans, A (2023) How great companies deliver both purpose and profit. Journal of Chinese Economic and Business Studies, 21 (3). pp. 465-469. ISSN 1476-5284


Critics of capitalism argue that companies need to be heavily regulated, to reduce their profits and redistribute value to society. Defenders of capitalism reply that profits are essential to a well-functioning economy; they fund future investment by companies and provide returns to shareholders, such as households and pension funds. Both views are based on the pie-splitting mentality, that the value created by a company is a fixed pie that shareholders and society fight over. This article describes the pie-growing mentality, that shareholders and society are not in conflict. By having a purpose – being driven by the desire to create value for society – companies grow the pie, increasing shareholders as well as stakeholder value. It discusses how companies can put purpose into practice and how citizens can play their part.

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Item Type: Article
Subject Areas: Finance
Date Deposited: 20 Jun 2023 09:53
Date of first compliant deposit: 20 Jun 2023
Last Modified: 23 Sep 2023 06:03

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