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> MS are profit motivated (by definition) Not by definition, but by "Dodge v. Ford Motor Co." [1] the Michigan Supreme Court case that held "A business corpora

> MS are profit motivated (by definition) Not by definition, but by "Dodge v. Ford Motor Co." [1] the Michigan Supreme Court case that held "A business corporation is organized and carried on primarily for the profit of the stockholders." [1]: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

FrobeniusTwist 4y ago
That case probably (it's been a while since I checked) still shows up in most business law casebooks, but it doesn't really help much in understanding modern judicial thinking about the role of "profit motivation" in corporate decision-making. Here's the abstract from a fairly recent paper in the principal journal of the ABA's Business Law Section in which the case and its relevance today was discussed in detail: This article examines Dodge v. Ford on its 100th anniversary. In Dodge v. Ford, the Michigan Supreme Court held that a business corporation is organized for the profit of its shareholders, and the directors must operate it in service to that end. Despite the fact that Dodge v. Ford is rarely cited in judicial opinions, the case continues to spark controversy in legal scholarship. There is little justification for this scholarly attention because the factual basis is little more than a caricature of Henry Ford, and subsequent developments in corporate law have all but eviscerated the precedential value of the case. Rather, the legacy of Dodge v. Ford may simply be that it serves as a convenient talisman, standing for the one sentence anyone actually cares about and rolled out with each new battle in the war between shareholder profit maximization and corporate social responsibility. Michael J. Vargas, Dodge v. Ford Motor Co. at 100: The Enduring Legacy of Corporate Law’s Most Controversial Case, The Business Lawyer, Vol. 75, p. 2103 (2020).
- tracker1 4y ago
  I think it definitely needs to be considered when it comes to corporate charters and especially in cases of IPO and investor on-boarding. Spelling out that a company's responsibility to long term stability and community at/above shorter term profits to investors in order to prevent certain paths in decision making that is all too common.
leshow 4y ago
Is it your contention that businesses only started being motivated by profit after this law got passed?
- thomasahle 4y ago
  I'm saying it's not "by definition" of a business that it's purely profit driven. You could imagine people starting businesses for other reasons. Some people are not aware that this was not always taken for granted, but has been the topic of court cases in the past.

FrobeniusTwist 4y ago

That case probably (it's been a while since I checked) still shows up in most business law casebooks, but it doesn't really help much in understanding modern judicial thinking about the role of "profit motivation" in corporate decision-making. Here's the abstract from a fairly recent paper in the principal journal of the ABA's Business Law Section in which the case and its relevance today was discussed in detail: This article examines Dodge v. Ford on its 100th anniversary. In Dodge v. Ford, the Michigan Supreme Court held that a business corporation is organized for the profit of its shareholders, and the directors must operate it in service to that end. Despite the fact that Dodge v. Ford is rarely cited in judicial opinions, the case continues to spark controversy in legal scholarship. There is little justification for this scholarly attention because the factual basis is little more than a caricature of Henry Ford, and subsequent developments in corporate law have all but eviscerated the precedential value of the case. Rather, the legacy of Dodge v. Ford may simply be that it serves as a convenient talisman, standing for the one sentence anyone actually cares about and rolled out with each new battle in the war between shareholder profit maximization and corporate social responsibility. Michael J. Vargas, Dodge v. Ford Motor Co. at 100: The Enduring Legacy of Corporate Law’s Most Controversial Case, The Business Lawyer, Vol. 75, p. 2103 (2020).

tracker1 4y ago
I think it definitely needs to be considered when it comes to corporate charters and especially in cases of IPO and investor on-boarding. Spelling out that a company's responsibility to long term stability and community at/above shorter term profits to investors in order to prevent certain paths in decision making that is all too common.

leshow 4y ago

Is it your contention that businesses only started being motivated by profit after this law got passed?

thomasahle 4y ago
I'm saying it's not "by definition" of a business that it's purely profit driven. You could imagine people starting businesses for other reasons. Some people are not aware that this was not always taken for granted, but has been the topic of court cases in the past.