A Framework for Teaching the Goal of the Firm in Introductory Business Classes: Shareholder Wealth Maximization Ethicality and Classical Philosophical Paradigms

Keywords

shareholder wealth maximization, business ethics, stakeholder theory

Abstract

In many business textbooks and courses, particularly in finance curricula, students continue to be taught that the single goal of the firm is shareholder wealth maximization (SWM). Although this statement presents a clear and succinct goal, which adheres well to rational expectations and financial economic models, I argue it is over simplistic and may actually be detrimental to student learning and professional conduct. A strict adherence to the SWM goal has at least anecdotal evidence of cases in which business students act unethically after graduating. In this article, I propose a framework that includes a discussion of four classical ethics camps vis-à-vis SWM in foundational business classes. I assume students have not yet had a philosophical or business ethics course and begin the discussion from the ground up.

Original Publication Citation

"Brau, R.I. (2016) A Framework for Teaching the Goal of the Firm in Introductory Business Classes: Shareholder Wealth Maximization Ethicality and Classical Philosophical Paradigms, Journal of the Utah Academy of Sciences, Arts & Letters 93, 135-161."

Document Type

Peer-Reviewed Article

Publication Date

2016

Publisher

Journal of the Utah Academy of Sciences

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Assistant Professor

Link to Full Text

Share

COinS