companies publicly trading more to create more capital to expand the company

Each question half page and two references


In the last 40 years the main thing that has changed is companies publicly trading more to create more capital to expand the company and do more projects for the company. Take a company like amazon for example. Amazon is always expanding with their capital money.

They always take the money and reinvest it back into the company to continue to grow. Amazon has added multiple facilities in every state to increase distribution. Amazon has had a fleet of vehicles to help deliver packages faster to customers for faster results. Lastly amazon invest in their employees with good benefits packages and compensation packages that make good workers want to come to the company and stay with the company for a long time.

Companies still want to make a profit for their shareholders at the same time but they feel the best way to do this is by constantly innovating with their companies. Reid Hoffman who was the cofounder of LinkedIn stated One of the more unique characteristics that I tend to look for is an infinite learning curve, because most of the time the businesses that Im investing in are breaking new ground and creating a new area, he said.

You have to have a sense of, How am I going to learn a new area (Bryant, 2019)? This goes back to companies innovating all the time. This is how going public can give the companies the fund to go public at the end of the day and grow the company.



The driving forces of the economy nowadays are from Millennials and Gen Z whose purchasing perspective has shifted consumer focus to social responsibility especially to the environment (Bright, 2020). Many businesses currently have contributed sustainability and socially responsible practices into their strategies which not only help the environment but their businesses bottom lines. In a world that is striving for sustainability, going green is a common practice for any business to become competitive today.

In other words, sustainability and socially responsible are becoming more important for all companies across the industries in which companies need to set a goal and give back to societies and the environment.

Going green is a smart strategy that provides a company rewards, revenue, market share, loyalty to customers, and the brand. There are many ways that companies can do, for example, reducing the use of electricity, energy, and plastic. It does not only help the environment but ultimately helps the company benefits.

However, to succeed in the business in this era, any organization has to have a strong culture related to these topics, sustainability, and social responsibility, because everything will be completed by the root of the organization cultural belief.

If people in the organization have the same belief, consequently, it will boost the results/objectives. Giacoman & Eberhardt (2020) show that “Companies with a distinctive culture are twice as likely to have strong growth relative to their industry average and are almost twice as profitable. It is a reason why many companies like Nike and Adidas are more notable than other brands which both of them have focused on reducing environmental harm such as minimizing footprint and reducing the use of plastic.



Friedman once said that, according to Nevins (2019), There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition  without deception or fraud. Although the Friedman position has been strawmanned into only profits matter, there is something more complex to this statement, particularly the latter half. By emphasizing the necessity of staying within the rules of the game, Friedman does recognize, albeit only very slightly, the need for an organization is beyond mere profits. That said, profit is still the focus of the assertion here.

In recent years since Friedman, the understanding of the business game has changed. Lipton et al. (2020) asserted that the purpose of a firm goes beyond merely profits and in fact includes the notions of conducting lawfully, ethically, profitably, collaboratively, responsibly, and sustainably over the long term. In other words, yes, profits are essential, but they are only one dimension of the overall equation. By drawing attention to the lawful and ethical aspects, it reminds us of what Friedman has already said: play by the rules i.e., laws and mores.

But the idea of functioning collaboratively, responsibly, and sustainably is new. Corporations are now expected to engage all its stakeholders, not just the shareholders and customers: employees, society, and the industry are all key factors to consider in on  business leadership now. Although profits are one aspect of value that firms can create, they can also create societal, environmental, and economic value for other stakeholders (Kelly, 2009). Sinek (2020) emphasized that profits are admirable goals, but it is also a matter of how we got there: if we are profiting and attaining goals via arbitrary metrics but harming morale and the environment, acting in a way that is socially irresponsible, how much value are we really creating? Are we actually living out our organizational mission? Money, said Sinek (2020), fuels the company, but the goal is the destination an accomplishment, not the fuel.

Therefore, Friedman is not wholly wrong: profits do matter, lest the functioning of the machine cease to exist. However, what he did get wrong, per more contemporary literature and consumer needs, is that profits are the sole purpose of an organization. Leadership acting ethically, the firm operating within legal compliance, and producing long-term value instead of short-term and meaningless gains are aspects unconsidered in the initial Friedman assertion.

For instance, The LEGO Group, illustrated Durbin (2021), is focused on investing in social responsibility and sustainability efforts. By attaining carbon neutrality, using only sustainable packaging products, and installing solar panels, the company expresses its dedication to missions beyond mere profits. For many 21st century consumers, this means everything.

In short, profits were never lost as a central goal, but ultimately more responsibility has been added and more dimensions require analysis to indicate a firm is acting in a way that is compatible with this new way of thinking about business. Stakeholders need to be brought into the fold in a meaningful way beyond the bottom line (Lipton et al., 2020).