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Case | HBS Case Collection | December 1974 (Revised April 1975)

Fuqua Industries (C)

by Malcolm S. Salter and Richard G. Hamermesh

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Format: Print 11 pages Find at Harvard

Citation:

Salter, Malcolm S., and Richard G. Hamermesh. "Fuqua Industries (C)." Harvard Business School Case 375-191, December 1974. (Revised April 1975.)

About the Authors

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Malcolm S. Salter
James J. Hill Professor of Business Administration, Emeritus

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Richard G. Hamermesh
Baker Foundation Professor of Management Practice, MBA Class of 1961 Professor of Management Practice, Retired
Entrepreneurial Management

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More from these Authors

  • Case | HBS Case Collection | September 2019

    Dementia Discovery Fund

    Richard G. Hamermesh, Kathy Giusti and Sarah Gulick

    The case is set in March 2019, and tells the story of the founding of the Dementia Discovery Fund (DDF). The idea for the fund began in 2015, when then-Prime Minister David Cameron spoke about the importance of making breakthroughs in dementia research, and pledged money from the UK government for research. This in turn led to the search for a venture capital (VC) firm that could lead manage a fund, and the selection of SV Health to do that, including having Kate Bingham as a managing partner. The case describes the social and scientific needs for more dementia research, as well as the fundraising and initial team building of the fund. After the fund grows beyond the expected size, the case describes the hiring of a CEO, and asks what the next investment for the fund should be: a start-up that might soon be able to launch clinical trials, or an early-stage company with promising new research?

    Keywords: Venture Capital; Investment Funds; Mission and Purpose; Recruitment; Health Care and Treatment; Pharmaceutical Industry; Financial Services Industry; Boston; Massachusetts; London; England;

    Citation:

    Hamermesh, Richard G., Kathy Giusti, and Sarah Gulick. "Dementia Discovery Fund." Harvard Business School Case 820-045, September 2019.  View Details
    CiteView DetailsEducatorsPurchase Related
  • Teaching Note | HBS Case Collection | July 2019

    Intermountain Healthcare: Pursuing Precision Medicine

    Richard G. Hamermesh, Robert S. Huckman and Julia Kelley

    Citation:

    Hamermesh, Richard G., Robert S. Huckman, and Julia Kelley. "Intermountain Healthcare: Pursuing Precision Medicine." Harvard Business School Teaching Note 820-019, July 2019.  View Details
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  • Working Paper | HBS Working Paper Series | 2019

    Rehabilitating Corporate Purpose

    Malcolm S. Salter

    In this paper, I address how the ascendance of the theory of shareholder value maximization into the central consciousness of public corporations and its canonization as the only legitimate expression of corporate purpose has contributed to both a widening breach between American-style capitalism and justice and increased alienation of the public from capitalism as a system of economic governance. Despite the vast academic literature and many management testimonials advocating a broader conception of corporate purpose—one that addresses the interests of firms’ multiple constituencies and the well-being of their employees, customers, and operating environment—shareholder value maximization remains the de facto expression of corporate purpose and guide for decision-making for most publicly owned firms in the United States (and the United Kingdom). I argue that narrowing the compatibility gap between capitalism and justice and reversing declining public trust in contemporary capitalism requires a very different conception of corporate purpose—one reflecting established moral and economic principles that challenge those underlying the shareholder value maximization doctrine. To this end, I start by discussing the vulnerability of contemporary capitalism, which is largely rooted in the social and moral disengagement of firms operating under this doctrine. I then explain how the emergence of the doctrine over the past four decades has led to this social and moral disengagement, what the theoretical underpinnings of the shareholder value maximization doctrine are, how this doctrine has become so deeply ingrained in our capitalist system, and the conceptual and practical problems presented by this doctrine and related theory of the firm. Next, I propose an alternate, principle-based guideline for corporate purpose that blends Aristotle’s theory of reciprocal justice with considerations of corporate purpose, along with Chester Barnard’s compatible theory of business organizations as cooperative systems. Aristotle stresses the ethicality of cooperation in transactional settings; Barnard stresses the efficiencies and adaptive benefits flowing from cooperation. Both see utility in truly reciprocal, cooperative relationships, which is not a priority in a shareholder value maximization regime. This alternative approach—referred to as ethical reciprocity—not only provides the basis for a rebuttal of the shareholder-primacy doctrine based on principles of justice and economic efficiency, but also offers a practical guideline for balancing the interests of shareholders and other corporate constituencies in the conduct of everyday business affairs. After presenting ethical reciprocity as a justice-sensitive guideline for corporate purpose, I turn to two practical questions related to its implementation: (a) whether “reciprocity practitioners” can compete in a world dominated by shareholder value maximizers, and (b) if so, what asset holders and asset managers, corporate directors, and educators can do—and, in some instances, are currently doing—to foster increased attention to both the principle and spirit of ethical reciprocity in the definition and pursuit of corporate purpose.

    Keywords: Capitalism; justice; corporate purpose; shareholder value maximization; ethical reciprocity; Economic Systems; Business Ventures; Mission and Purpose; Ethics; Corporate Social Responsibility and Impact;

    Citation:

    Salter, Malcolm S. "Rehabilitating Corporate Purpose." Harvard Business School Working Paper, No. 19-104, April 2019.  View Details
    CiteView DetailsSSRN Read Now Related
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