One of the lessons of the Great Recession is that managing for shareholder value can result in damage to other stakeholders. This paper seeks to articulate a new purpose for the firm that is more legitimate than maximizing financial returns for shareholders.
The paper examines the various management alternatives: modify the shareholder value strategy; become socially responsible; and adopt radical management practices.
A central question is whether the alternative management models will contribute to corporate longevity. The paper suggests an alternative approach: the virtuous corporate.
The paper looks at the virtuous corporation which would balance the need to reward external stakeholders with relentless attention to internal excellence and virtue.
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