Not Just for Profit

The drawback of prevailing conventional shareholder-centric (corporate) design is that it focuses only on achieving short term goals and clearly overlooks long term benefits. Corporate model works with for-profit motive with out holding any responsibility for customers’ interests, protecting the environment, and supporting the communities in which they operate with social responsibility. The recession of 2008 is the corollary of the pursuit of making immediate profit by investment bankers and mortgage brokers who disregarded the impact of their actions on customers, economy, stockholders and the company itself in a long run. This clearly indicates the need for alternative and efficient designs that could replace this outdated industrial age model.

Though these alternative designs are emerging they are still at very nascent stages and needs further experimentation. But they indicate the transition of the conventional “for-profit” approach to “for-benefit”, which is more philanthropic.

In her article, Not Just for Profit, author Marjorie Kelly discusses the pros and cons of three broad emerging and promising approaches: stakeholder-owned companies, mission-controlled companies, and public-private hybrids, termed as hybrid between for-profit and nonprofit approaches. They could help in designing alternative models that could address the priorities of the 21^st century better.

Read the entire article here.