Please Read The Article And Answer The Questions

Please Read The Article And Asnser He Questionswhat Is The Purpose O

Please read the article and answer the questions: "What is the purpose of corporations?" or "Maximizing profits for the shareholder." In business school, are we still going down that path for shareholders? Sundaram and Inkpen have taken the essence of those questions and presented a paper in 2004 that seeks to answer from their perspective of both shareholder and stakeholder. What is your opinion? Did they answer those questions in their paper? Again, a one-page response is fine but please no more than 2 pages. No plagiarism. Work has to be done by 3PM today mountain time.

Paper For Above instruction

The purpose of corporations has long been a subject of debate among scholars, practitioners, and educators. Traditionally, the dominant perspective, especially within business schools, has been that corporations primarily exist to maximize shareholder value. This shareholder-centric view emphasizes profit maximization as the fundamental goal, prioritizing the financial interests of investors. However, an evolving understanding of corporate purpose recognizes the importance of stakeholders—employees, customers, suppliers, communities, and the environment—in ensuring long-term sustainability and ethical operations.

In their 2004 paper, Sundaram and Inkpen explore the tension between these two perspectives—shareholder primacy and stakeholder theory—and attempt to reconcile them by examining how corporations can create value for multiple constituencies simultaneously. Their analysis is rooted in the idea that the goal of a corporation is not merely to generate short-term profits but to foster sustainable, long-term success through responsible management practices that consider stakeholder interests.

Sundaram and Inkpen argue that focusing solely on shareholder value can be shortsighted and potentially detrimental, leading to practices that undermine ethical standards, employee morale, and social trust. Conversely, their stakeholder approach emphasizes that incorporating the interests of various groups can lead to more resilient organizations capable of adapting to changing environments. They advocate for a balanced approach, where shareholder value remains important but is pursued within a broader framework that recognizes stakeholder needs as integral to long-term corporate health.

From my perspective, Sundaram and Inkpen effectively address the questions about the purpose of a corporation. They acknowledge the historical focus on shareholders but propose a more holistic view that aligns with contemporary challenges. They suggest that companies should aim to create shared value—benefiting shareholders indirectly through responsible and sustainable practices—and emphasize ethical considerations that go beyond profit, aligning with the movement toward corporate social responsibility (CSR) and environmental, social, and governance (ESG) criteria.

In conclusion, Sundaram and Inkpen's paper advances the conversation by emphasizing that the purpose of a corporation should not be narrowly defined as profit maximization for shareholders alone. Instead, it should encompass a broader responsibility to stakeholders, fostering sustainable growth and societal well-being. Their insights suggest that this approach not only answers the core questions but also provides a more strategic and ethical framework for modern corporations. While the focus on shareholder value remains relevant, integrating stakeholder interests is essential for long-term success in today's interconnected and socially conscious world.

References

• Sundaram, A.K., & Inkpen, A.C. (2004). The Globalization of Corporate Social Responsibility. Business & Society, 43(2), 189-211.
• Freeman, R.E. (1984). Strategic Management: A Stakeholder Approach. Pitman Publishing.
• Porter, M.E., & Kramer, M.R. (2011). Creating Shared Value. Harvard Business Review, 89(1/2), 62-77.
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