Profit And Loyalty In Dodge V. Ford Motor Co.

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Historically, the purpose of business was defined as generating as much profit for shareholders as possible. However, given numerous negative externalities created by business and the impact businesses have on their other stakeholders, this definition of a business corporation is limiting and no longer correct. Profit and wealth are great motivators for individuals and businesses, but measurement of success cannot be simplified into “the bottom line”; thus, profit should not be the sole motivator for corporations and individuals. The negative externalities associated with this mindset are recurrently highlighted in the news—poor working conditions, global climate change, layoffs due to unethical decision-making, and more. These externalities …show more content…
Some argue that shareholders also own corporate property, but it is clear that in an event of liquidation, equity owners rank last in seniority and have no ownership over the assets of the company; thus it is easy to argue that a corporation is not the property of shareholders. Proponents of this view further claim that the sole purpose of a corporation is to generate wealth, as set out in Dodge v. Ford Motor Co. (1919). Normally, corporate performance is measured on how much one reinvests to grow and how many jobs they create to improve the standard of living of those in the middle class. However, profit growth has become the new measurement norm as companies feel pressure from shareholders to embrace capitalism and free market …show more content…
It is assumed that this capitalist (generally speaking) is not immoral and believes in acting ethically; rather, this capitalist is unaware that long-term value and wealth can be accumulated by forgoing an immediate “violent” action—that may yield and immediate benefit. John Wesley, the founder of Methodism, would agree with Gandhi in that accumulating capital in itself is not “violent,” but the means as to which capital is acquired can prove to be so. Wesley strongly promotes the accumulation of capital, and is considered a strong proponent of capitalism. So the question now becomes, is there a way to reconcile Gandhi’s teaching with a capitalistic society? It may seem that this argument boils down to capitalism versus socialism, but that is not the case. There exists a middle ground, as Gandhi explains, “As soon as a man looks upon himself as a servant of society, earns for its sake, spends for its benefit, then purity enters into his earnings and there is ahimsa in his venture.” In this situation, Gandhi is referring to an individual changing his/her human nature to accommodate society and those that inhabit it. In a similar vein, a corporation or executives of a corporation, in a capitalistic society/free market, must look at their business as providing value for all of its stakeholders: be it customers, employees, the environment, shareholders, and other businesses. Though Gandhi’s

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