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:
“... criticism ... makes very little dent upon me, unless I think there is some real justification and something should be done.”
—Eleanor Roosevelt (1884–1962)
“It is the will of God that we must have critics, and missionaries, and Congressmen, and humorists, and we must bear the burden. Meantime, I seem to have been drifting into criticism myself. But that is nothing. At the worst, criticism is nothing more than a crime, and I am not unused to that.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
“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)