How great companies deliver both purpose and profit

Alex Edmans

Journal of Chinese Economic and Business Studies, 2023, vol. 21, issue 3, 465-469

Abstract: 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.

Date: 2023
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DOI: 10.1080/14765284.2023.2219439

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