Advantages of shareholders or stakeholders?

Milton Friedman believed that a company’s sole responsibility was to maximize shareholder value (Friedman, 1970). Since then, we have come a long way in developing a stakeholder model that recognizes the interests of our employees and their families, communities, suppliers, customers, as well as competitors, governments, and even everyone in the region where the company is located. I have adopted it. ..

Years ago, Henry Ford lost a proceeding in which some of his shareholders (especially the Dodge brothers) alleged that they did not share profits with them. The Michigan Supreme Court has ruled that Ford must distribute profits to shareholders rather than build a smelter (Dodge vs Ford Motor Company, 204 Mich. 459 (1919)). “My ambition is to hire more men, expand the benefits of this industrial system as much as possible, and help them build their lives and homes,” Ford said. (Id .at505).

“Business companies are organized and operated primarily for the benefit of shareholders,” the Supreme Court of Michigan said. “Distribute a very large amount of money to shareholders on or near August 1, 1916.” That was their duty. ” “(Id. At505, 509). It ordered Ford Motor Company to pay an additional dividend of $ 19,275,385.96 (Id. At491). As a result, Henry Ford kept the company private and made other shareholders private.” I bought it and took full control. Apparently, he disagreed with Friedman.

We are now aware that Milton Friedman was wrong. The most socially responsible way to bring positive long-term results to the company and society is to take into account the interests of all stakeholders.

reference:

Dodge vs Ford Motor Company, 204 Mich. 459, 170 NW 668; 1919 Mich LEXIS 720; 3 ALR 413 (1919).

Friedman, M. (September 13, 1970). The social responsibility of a business is to increase profits. New York Times Magazine [electronic version].. Obtained from February 21, 2009 http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html