BETTER RESEARCH FOR BETTER BUSINESS: The Expert Panel on Management, Business, and Finance Research
Neoclassical economics and several management theories assume that the corporation’s objective is profit
maximization subject to capacity constraints. The central focus is shareholders as the ultimate residual
claimant, providing the necessary financial capital for the firm’s operations (Jensen and Meckling, 1976;
Zingales, 2000). However, there is substantial variation in how corporations actually compete and pursue
profit maximization. Different corporations place more or less emphasis on the long-term versus the
short-term (Brochet, Loumioti, and Serafeim, 2011); care more or less about the impact of externalities
from their operations on other stakeholders and the environment (Paine, 2004);...