"Big Myths and the Radicalization of Corporate Forms"
Abstract: We will be presenting early-stage work on the evolution of for-profit and nonprofit corporations. In particular, we draw parallels between publicly-traded, for-profit companies and nonprofit charities, arguing that each corporate form has been “radicalized” by a big myth about what managers can and cannot do according to the law. By radicalized, we mean that managers have become myopically focused on what’s happening inside the organizational boundary or beyond it. In the case of publicly-traded, for-profit companies, the focus is on inside the organization’s boundary and can be seen in the focus on short-term profit maximization and neglect of externalities. The “big myth” perpetuating this focus is that managers must maximize short-term shareholder value to meet their fiduciary duty under corporate law. In the case of nonprofit charities, the focus is beyond the organization’s boundary and can be seen in the practice of deploying all available resources into programmatic activities and neglecting capability investment. The “big myth” perpetuating this focus is that managers who choose to invest resources on their own organization, as opposed to deploying them for mission-centric activities, are violating the spirit of charities law.
LOCATION:Chao 300 STATUS:CONFIRMED DTSTART:20181129T173000Z DTEND:20181129T190000Z END:VEVENT END:VCALENDAR