The book referred to above is a very challenging book and really makes you think about the motivation and character of the public corporation. The key thing apparently is that the owners, shareholders, are not libel or responsible for the activity of the corporation. The only interest the shareholders have is making a profit. To serve the shareholders the company management must act to maximize profit as long it is within the law. Thus the corporation is completely amoral. Morality is not a motivation for the corporation.
Even if the management wants to be responsible, they have no right to do something that will reduce the profitability of the corporation. However if management can make the case that such things will enhance the business and make it more profitable then it a valid pursuit. Some interesting examples are given. BP has jumped on the global warming bandwagon many years ago and it has moved them into one of the top oil companies because people feel good about buying gas from a "responsible" corporation. However they also are pushing to drill in the Alaska delta even though it may do harm to the environment there. This may the "right" thing not to do but without an economic argument they must do the profitable thing.
The money that every corporation spends on lobbying is designed to talk governments into giving the corporation to act without restraint. They claim the industry and market forces should control what these people do and do not do. The great debate on global warming is an example to lobbying at the max. Who can divine what the real story is.
Advertising is a great example. I guess you have seen the GM commercials about how they helped the allies in the second world war. They fail to mention that their subsidiary in German supplied the Germans with much of their war machine. The argument is that as long as it was not against the rules management must optimize profit for the shareholders. Even if management does not want to do it as individuals.
I think this is a must read for politicians, board members, and senior management. We must be very leery of the arguments for deregulation and letting market forces control the corporation.
I found the whole book both scary and enlightening. We will be discussing this book at our Senge Circle this week and I am looking forward to the discussion. More later.