Limited Liability – Good or Bad for Society? (Part 2)

Business & Management. He-Joon Chang in his popular book “23 Things They Don´t Tell You About Capitalism” (see my previous post) argues that limited liability, combined with how plc´s have been managed recently, particularly in the Anglo-Saxon world of the USA and the U.K., has been bad for society. He traces the origins of the problem back to 1981 when Jack Welsh, the then CEO of General Electric, coined the term ´maximizing shareholder value´. According to Welsh, this is what companies should do; aim to raise company share prices by increasing profits as much as possible and give as much dividend … Continue reading Limited Liability – Good or Bad for Society? (Part 2)

Limited Liability – Good or Bad for Society? (Part 1)

IB Business & Management. On the IB Business course we learn that businesses maximizing their profits is generally a good thing, that the concepts of limited liability and company legal structures such as the public limited company (plc)  are positive, useful things for society, and that a good business manager should consider the long term interests of all the stakeholders in the business. However, is the concept of limited liability really good for society, are plc’s and the way they are run nowadays positive for society, and do business managers really take into consideration the long term interests of all the … Continue reading Limited Liability – Good or Bad for Society? (Part 1)