We saw in the last video the 1980s was a decade of profound shifts, many of which are still felt in today's economy. Another shift that has occurred pertains to the very nature of the corporation: to whom should corporations be responsible? Should corporations be responsible only to their shareholders, or to employees and society as well? This question is highly controversial and, interestingly, ideas about it have fundamentally changed over time.
After watching the video and answering the questions below, move on to the next video, in which Professor Kochan interviews former executive John Reed for his view on these important and timely questions.
Video: The Purpose of the Corporation
> Download from iTunes U (MP4 - 24MB)
> Download from Internet Archive (MP4 - 24MB)
Attentiveness Question 1
Is Xerox an example of a firm that focuses solely on maximizing shareholder value or meeting the needs of multiple stakeholders?
Explanation
As discussed in the video, Xerox tries very hard to meet the needs of multiple stakehlders, including its employees.
Attentiveness Question 2
Explanation
Many corporations became primarily interested in providing short-term benefits to their stockholders.