Maximizing corporate value key to social welfare and accountability
The article discusses how companies can maximize their value by focusing on their total market worth, including all financial claims. It argues that having a single objective function is crucial for making purposeful decisions. While stakeholder theory suggests considering the interests of all stakeholders, it may make managers unaccountable due to the lack of clear tradeoffs. By prioritizing long-term value maximization while still considering stakeholders, companies can create value effectively.