Author(s): Prasad Padmanabhan, Ajaya K. Swain
This paper argues that despite changes in the technological and the business environment, with new concerns placed on people and planet in addition to profits, the objective of the public firm remains the same as it always has been ??? to maximize common shareholder wealth. We address the relevance of the old objective of the public firm in the current era of shareholder activism, instant social media, a discriminating customer base that wants products that do not destroy the planet, and the advent of corporate social responsibility. We suggest that although the world has changed, the age-old mantra of the objective of the firm remains unchanged. The business environment facing public firms has changed considerably over the last few decades, and firms have to manage the process of efficiently navigating these choppy waters.