Criticism
See also: Corporate social responsibilityThe sole concentration on shareholder value has been widely criticized, particularly after the late-2000s financial crisis. While a focus on shareholder value can benefit the owners of a corporation financially, it does not provide a clear measure of social issues like employment, environmental issues, or ethical business practices. A management decision can maximize shareholder value while lowering the welfare of third parties.
It can also disadvantage other stakeholders such as customers. For example, a company may, in the interests of enhancing shareholder value, cease to provide support for old, or even relatively new, products.
Additionally, short term focus on shareholder value can be detrimental to long term shareholder value; the expense of gimmicks that briefly boost a stocks value can have negative impacts on its long term value.
Read more about this topic: Shareholder Value
Famous quotes containing the word criticism:
“Of all the cants which are canted in this canting world—though the cant of hypocrites may be the worst—the cant of criticism is the most tormenting!”
—Laurence Sterne (1713–1768)
“I, with other Americans, have perhaps unduly resented the stream of criticism of American life ... more particularly have I resented the sneers at Main Street. For I have known that in the cottages that lay behind the street rested the strength of our national character.”
—Herbert Hoover (1874–1964)
“Nothing would improve newspaper criticism so much as the knowledge that it was to be read by men too hardy to acquiesce in the authoritative statement of the reviewer.”
—Richard Holt Hutton (1826–1897)