7 ms·

Companies don't exist to improve society, but to provide something of value to their customers in exchange for money. If society benefits along the way, that's

• aburan28 12y ago
  Well some companies exist not to provide something of value to customers but rather provide increased earnings per share, better P/E ratios, etc to stockholders.
  • blumkvist 12y ago
    Stockholders ARE their customers. Relevant: http://hbr.org/2014/03/choosing-the-right-customer/ar/1 http://hbr.org/2014/03/choosing-the-right-customer/ar/1
• georgemcbay 12y ago
  "investment firms and hedge funds will benefit their clients by investing their money and (hopefully) getting them a good return" Ideally, but in the really-real world they often fuck their clients because conflict of interest rules rarely exist or when they do aren't enforced. Goldman Sachs (already mentioned in the thread) being a prime example of this, eg the Abacus deal, the whole "muppet" culture, etc.
  • icebraining 12y ago
    So how do they still have clients?
    • camelite 12y ago
      State-of-the-art salesmanship.
• lazaroclapp 12y ago
  Sure, but as a society we (should?) also try to discourage business models that significantly harm society without benefiting it in any comparable way. Hitmen provide a value to their customers in exchange for money, doesn't mean we need to allow it as a valid business model. Granted, that's a extreme example and with financial firms is often very hard to know which of their many business models provide a net benefit, a net neutral or a net harm to society. But the base premise of "well, companies should be allowed to act as unethically as the hell they wish" is not really a good or reasonable premise to accept.
• kriro 12y ago
  By definition, profit benefits society. Customers voluntarily buy products which companies sell voluntarily (at least in the typical case there are corner cases of course). Both parties profit which is evident by the exchange taking place. Society is made up of individuals, if individuals profit so does society. Companies exist because there's opportunities for profit. So I'd argue they do indeed exist to improve society. On a larger scale one might say they improve society by allocating factors of production to the places where they are most useful.
  • jjoonathan 12y ago
    > By definition, profit benefits society. No. http://3.bp.blogspot.com/-v4zI8gKuFug/T-vpFAjdXeI/AAAAAAAAB-c/un8iws6A1tI/s1600/Revelations_008.jpg http://3.bp.blogspot.com/-v4zI8gKuFug/T-vpFAjdXeI/AAAAAAAAB-... More formally, Nash equilibria != global optima. It is not uncommon for companies to spend money destroying value for their customer -- and to profit from doing so! See: keurig DRM, speed grading in the semiconductor industry, Goldman Sachs cornering the Aluminum market, Enron shutting off power to create the infamous rolling blackouts. There are recordings of Enron traders literally giggling as they call plant managers to order them offline at times of peak load. Profit is about leverage, but value creation is only one of many ways to obtain leverage, and it's often not a very reliable or effective way (just ask Bengali sweatshop workers). Other methods for obtaining leverage are generally "evil" and most certainly do NOT benefit society, but they are very effective, especially in industries where best-practices have long since solidified and the only way to gain a competitive advantage is a sprinkling of "black magic". The most obvious dark patterns are illegal, but the lethargic whack-a-mole from our legislative and judicial branches is nowhere near sufficient to stem the tide.
    • conjecTech 12y ago
      You've shown profit is not necessarily optimally beneficial for customers. You haven't show that it isn't still beneficial.
      • jjoonathan 12y ago