Corporate Irresponsibility: America's Newest Export [Hardcover]

Professor Lawrence E. Mitchell (Author)

Book Description

Publication Date: November 1, 2001

Corporations are often so focused on making short-term profits for their stockholders that they behave in ways that adversely affect their employees, the environment, consumers, American politics, and even the long-term well-being of the corporation, says Lawrence Mitchell in this provocative book. This is a significant issue not only in the United States but also in the world, for many countries are beginning to emulate the American model of corporate governance. Mitchell criticises this emphasis on profit maximisation and the corporate legal structure that encourages it, and he offers concrete proposals to bring about more socially responsible corporate behavior. Mitchell declares that managers should be freed from the legal and structural constraints that make it difficult for them to exercise ordinary moral judgment and be held accountable for their actions. He suggests, for example, that earnings reports be required annually rather than quarterly, that the capital gains tax be increased on stocks held for fewer than thirty days, and that elections of corporate boards of directors be held every five years rather than every year. Mitchell places the problem of corporate irresponsibility within the broader context of American life and demonstrates the extent to which contemporary corporate behaviour represents a corruption of our cherished liberal values of personal freedom and individuality.

Editorial Reviews

From Publishers Weekly

In the not-too-distant past, corporations served three constituencies in a fairly equal way stockholders, employees and customers. That paradigm, Mitchell argues quite persuasively, has given way to one overriding goal: profit maximization and the creation of greater shareholder wealth. According to Mitchell, the laserlike focus on short-term profits instead of long-term sustainable growth causes corporate managers to abandon concerns for employees, customers, the environment and society at large to ensure that their company meets its quarterly profit targets, which will keep stock prices rising. Mitchell, a law professor at George Washington University, further argues that managers are forced to place profit maximization above all else, not out of personal greed, but because of the legal structure of modern corporations. To once again make corporations more accountable, Mitchell offers a number of suggestions, including extending corporate directors' terms, requiring companies to disclose figures on a yearly rather than quarterly basis and, in his most original proposal, changing accounting methods to treat employees as assets rather than liabilities. This is an important, provocative book that is sure to stir debate between groups who advocate the need for more corporate accountability and those who see nothing wrong with the status quo.

Copyright 2001 Cahners Business Information, Inc.

About the Author

Lawrence E. Mitchell is John Theodore Fey Research Professor of Law at The George Washington University and the director of the Sloan Program for the Study of Business in Society.

Product Details

• Hardcover: 320 pages
• Publisher: Yale University Press; First Printing edition (November 1, 2001)
• Language: English
• ISBN-10: 0300090234
• ISBN-13: 978-0300090239
• Product Dimensions: 8.6 x 5.9 x 1.1 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #1,907,832 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

14 of 14 people found the following review helpful:

4.0 out of 5 stars Lawyer-Author-Reformist: Double Oxymoron Overturned, February 27, 2002

By 

Robert D. Steele (Oakton, VA United States) - See all my reviews
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This review is from: Corporate Irresponsibility: America's Newest Export (Hardcover)

I just realized this is the third book by a lawyer I have absorbed in this month's reading, and that is somehow a scary thought. If lawyers are starting to write popular reformist tracts against unfettered capitalism and the export of the flawed U.S. approach to capitalism, something very interesting must be happening in the dark recesses of our national mind.

This is not an easy book to read but on balance it is a very important book and one that would appear to be essential to any discussion of how we might reform the relationship between the federal government with its 1950's concepts and regulations, corporations with their secularist and short-term profit and liquidation notions, and the people who ultimately are both the foundation and the beneficiaries (or losers) within the political economy of the nation and the world.

The author lays out, from a business law perspective, all the legal and financial reasons why our corporate practices today sacrifice the long-term perspective and the creation of aggregate value, in favor of short-term profit-taking. He makes a number of suggestions for improvement.

Toward the end of the book, citing Lipsett but adding his own observations, he digs deep and summarizes our corporate culture as one that threatens traditional forms of community and morality (Lipsett), while increasingly dominating--undermining--foreign governments and cultures. Elsewhere in the book the stunning failure of our form of capitalism in selected countries is explored.

Although there are adequate notes, there is no bibliography and the index is extraordinarily mediocre--not containing, for example, the references in the book to oversight, political, or regulation. One star is deducted for this failure by the publisher to treat the book's content seriously.

6 of 6 people found the following review helpful:

3.0 out of 5 stars Learned but heavy, March 13, 2002

By 

Bill Bailey (Danbury, Connecticut United States) - See all my reviews

This review is from: Corporate Irresponsibility: America's Newest Export (Hardcover)

I found myself being frustrated by the convoluted nature of his arguments to prove - IMO - unnecessarily academic and esoteric points. The writing style, while reasonably light, does labour on some issues to justify and support his arguments to a degree that is a little too involved. While I fully appreciate that Mitchell needs to properly formulate and support his arguments (and he is right in most of what he says I must add) - the shear "readability" suffers from the overly-academic rigour present. I would happily accept less rigour for have more anecdotes of misbehaviour for a more "easy read". Nevertheless what he says is very important, solid and I agree wholeheartedly with it.

5 of 5 people found the following review helpful:

5.0 out of 5 stars Superb., March 5, 2002

By 

John Q (Washington, D.C.) - See all my reviews

This review is from: Corporate Irresponsibility: America's Newest Export (Hardcover)

The way Mitchell breaks down the corporate system in America today is outstanding. The way it practically predicts Enron is eventfully precise. His view for the future is one that is intricately complex, but at the same time simply logical. Great reading for those who are already knowledgeable about the subject or those newly acquainted with it.