Monday, August 22, 2011

Profit Motive

What is the business of business? Milton Friedman claimed it was to increase profits - that's it. Others say it is to increase social well-being. The New York Times reports that there may be a middle ground, that Porter and Kramer called shared value. Shared value is a concept in which firms focus on social problems in order to make a profit, and usually fits with the firms core business skills. Thus firms that are efficient in the production of some type of good or service also produce similar goods/services that solve or mitigate some social problem for a profit. Hence the shared part of shared value.

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