Week 12
Why are virtue and integrity so vital to the economy?
Based on the reading, I think the biggest issue that I think that can come up within a company is the issues that happen with stock options and the stake that owners have within the company. Not only are they getting wages for their positions, but they are also going to receive stock that can grow and decrease based on the value of the company. As owners and CEOs gain more and more stock wealth, they can also abuse or misuse such a system to benefit personal gain and control. As we saw in 2008, the economy is closely dependant on the stock market, and the rise and falls we see.
The real justification for a business.
I loved this analogy so much as I read and thought about what he was trying to say. I can't say it better than he did when he said, "The purpose of a business, in other words, is not to make a profit, full stop. It is to make a profit so that the business can do something more or better." In other words, businesses are to make a difference in the world first, and the profit a company makes is to increase that ability to increase the difference.
I think that there is a great example of this in the CEO of IKEA. IKEA's CEO will take a certain salary and will then invest the rest of the money that he could be making back into the company.
Solutions
I liked where he mentioned that we can create companies that benefit the rich and the poor. We can see that there are companies, outside of those mentioned in the article, are looking for ways to help develop the 3rd world, while also making a profit. Recently I heard Facebook was working on planes that will help to bring internet to people all over the world. Their belief was if they could gain access to the internet, they could educate themselves out of poverty.
Based on the reading, I think the biggest issue that I think that can come up within a company is the issues that happen with stock options and the stake that owners have within the company. Not only are they getting wages for their positions, but they are also going to receive stock that can grow and decrease based on the value of the company. As owners and CEOs gain more and more stock wealth, they can also abuse or misuse such a system to benefit personal gain and control. As we saw in 2008, the economy is closely dependant on the stock market, and the rise and falls we see.
The real justification for a business.
I loved this analogy so much as I read and thought about what he was trying to say. I can't say it better than he did when he said, "The purpose of a business, in other words, is not to make a profit, full stop. It is to make a profit so that the business can do something more or better." In other words, businesses are to make a difference in the world first, and the profit a company makes is to increase that ability to increase the difference.
I think that there is a great example of this in the CEO of IKEA. IKEA's CEO will take a certain salary and will then invest the rest of the money that he could be making back into the company.
Solutions
I liked where he mentioned that we can create companies that benefit the rich and the poor. We can see that there are companies, outside of those mentioned in the article, are looking for ways to help develop the 3rd world, while also making a profit. Recently I heard Facebook was working on planes that will help to bring internet to people all over the world. Their belief was if they could gain access to the internet, they could educate themselves out of poverty.
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