Search

In Binswanger (2009) it was shown that in a simple circular flow model of a pure credit economy, positive growth rates are necessary in the long run in order to enable firms to make profits in the aggregate. If the growth rate falls below a certain positive threshold level, firms will make losses. Certain aspects of this model are challenged by the papers of Zsolt Gilányi and Reeves Johnson in this issue of the Journal But nevertheless, both papers confirm the existence of a growth imperative in capitalist economies. This may be taken as evidence that the finding of a growth imperative is quite robust with respect to different model assumptions. [ABSTRACT FROM AUTHOR]

This paper reviews the literature regarding corporate social responsibilities now being remand & reframed as idea of creative capitalism across the west. The conceptual framework of philanthropy now being again re-inclined for profit maximizing but keeping in mind the welfare of society & bottom of the pyramid well being. So how this capital conservation, profit maximisation and further social inclusive growth models are adopted & have been successful are studied in this research paper. Also the replication of both profit, business sustainability and social inclusion has been done here in India by a hospital so the case study of Naryana Hrudayalya has being taken up along with The (RED) Campaign of Bill Gates. [ABSTRACT FROM AUTHOR]

The last decades have witnessed the emergence and development of the transnational phase of capitalism followed by the making of a transnational capitalist class. As key actors in today's global economy, more and more corporations, especially multinational and transnational, are in touch with one another than ever before in many sectors at a global scale. These corporations have become giant business organizations and wealthy and very powerful structures all over the world. The aim of our paper is to present the evolution of the world's ten largest corporations by their revenues and profits in the period 2014-2015. Our research is based on a literature review. [ABSTRACT FROM AUTHOR]

This paper examines Mathias Binswanger's (2009) model of a growth imperative and Zsolt Gilányi's (this issue) note on that model. The growth imperative in Binswanger's model is established through a profit-loan linkage such that loans, as well as the economy as a whole, must grow at a suficiently high rate so that firms make positive profits. To come to this conclusion, Binswanger derives a particular steady-state rate of growth in which profits are zero, which he refers to as the zero profit growth rate. In his note, Gilányi derives his own minimum growth rate based on a constant money supply. Gilányi then compares the two minimum growth rates--Binswanger's zero profit growth rate and his monetary growth rate--to determine which one is the binding constraint on the model. Upon comparison, Gilányi shows that his monetary constraint is always the binding constraint implying that the zero profit growth rate is redundant. This paper shows that after reformulating Binswanger's model in order to make its equations stock-flow consistent, the resulting zero profit rate of growth is always the binding constraint. This zero profit rate of growth is thus not redundant as was the case in Binswanger's model, and, on the contrary, it is Gilányi's monetary constraint that is redundant in the reformulated model. [ABSTRACT FROM AUTHOR]

This paper addresses broad issues concerning taxes on company profit in a globalized world in which companies, capital, and profit can move easily between countries. It considers reasons for national taxation of company profit in such a world, and reviews the development of such taxes in the OECD. The role played by tax havens is discussed and evidence on the responsiveness of companies to differences in taxation across countries is presented. A central issue is the allocation of taxable profit between countries. Existing practice has no clear rationale. Recent proposals for fundamental reform in the EU are discussed. [ABSTRACT FROM AUTHOR]

This paper is concerned with exploring the degree to which industry structure determines firm performance. Most of the business policy literature follows Porter in arguing that industry structure has an important influence on firm level profit rates. The arguments contained in this paper take a counter position. It is argued that a plausible alternative to the hypothesis that industry structure matters is the hypothesis that (holding demand constant) individual firm differences are the most important determinant of firm profitability. [ABSTRACT FROM AUTHOR]

The article informs that profit motive has frequently been described as the "driving force" of capitalistic society, and some of the more ardent supporters of this belief hold the profit motive in the same high esteem as their most sacred beliefs. The profit motive is assumed to be the implicit expression of society's goal for the firm. Further more, the profit motive is ascribed as being the objective of enterprise management, and this objective is assumed to be explicitly stated by the stockholders for the corporate management. The changes in the socio-economic environment, since the concept of a profit motive was first advanced, do not mean, analogously, that the profit motive is no longer a reasonable assumption regarding corporate management's goal. This paper re-examines the "profit motive" in modem society and relates the "modified profit motive" assumption to accounting practice. Thus, the paper consists of two parts. The first part describes, compares, and contrasts three viewpoints on how the motivational assumption for accounting theory can be re-interpreted in the current socioeconomic environment. The second part suggests specific extensions, from the foregoing analysis, to accounting practice.

This paper argues that the fundamental cause of the current economic crisis in the U.S. economy was a significant long-term decline in the rate of profit from the 1950s to the 1970s. Capitalists responded to this profitability crisis by attempting to restore their rate of profit by a variety of strategies, including: wages and benefit cuts, inflation, “speed-up” on the job, and globalization. These strategies have largely restored the rate of profit, but have resulted in stagnant real wages for workers for decades. As a result, household indebtedness has increased to unprecedented levels and must be substantially reduced in order to make possible a sustainable recovery. [ABSTRACT FROM PUBLISHER]

The article discusses the use of double-entry accounting for the solution of problems in business organization and administration. The contributions of economist Werner Sombart is discussed. Sombart is largely responsible for the thesis that systematic or scientific accounting has played in generating the rationalistic pursuit of unlimited profits by capitalists. The author notes that the calculation of an enterprises' profits and capital is central to the development of Sombart's thesis. In continuing enterprises, knowledge of the total or aggregated profitability or rate of return on capital is not relevant to decisions on changes in the use of firm resources.

This paper discusses distribution and the historical phases of capitalism. It assumes that technical progress and growth are taking place, and, given that, its question is on the functional distribution of income between labor and capital, having as reference classical theory of distribution and Marx's falling tendency of the rate of profit. Based on the historical experience, it, first, inverts the model, making the rate of profit as the constant variable in the long run and the wage rate, as the residuum; second, it distinguishes three types of technical progress (capital-saving, neutral and capital-using) and applies it to thehistory of capitalism, having the UK and France as reference. Given these three types of technical progress, it distinguishes five phases of capitalist growth, where only the second is consistent with Marx prediction. In the final phase, corresponding to financier-rentier capitalism and neoliberalism, the profit rate recovered from the fall of the 1970s, while wages have been growing below the growth of productivity [ABSTRACT FROM AUTHOR]

This paper offers an alternative approach to the repeated occurrence of Middle East 'energy conflicts'. Our analysis centres around the process of differential capital accumulation, emphasizing the quest to exceed the 'normal rate of return' and to expands one's share in the overall flow of profit. With the evolution of modern capitalism, the dictates of differential accumulation become an ever stronger unifying force, drawing both state managers and corporate executives into increasingly inextricable powerdriven alliances. The Middle East drama of oil and arms since the 1970s has been greatly affected by this process. On the one hand, rising nationalism and intensifled industry competition during the 1950s and 1960s forced the major oil companies toward a greater cooperation with the OPEC countries. The success of this alliance was contingent on the new atmosphere of 'scarcity' and oil crisis, which was in turn dependent on the progressive militarization of the Middle East. On the other side of the oil-arms equation stood the large US and European-based military contractors which, faced with heightened global competition in civilian markets and limited defence contracts at home, increased their reliance on arms exports to oilrich countries. Over the past quarter century, the progressive politicization of the oil business, together with the growing commercialization of arms transfers helped shape an uneasy 'Weapondollar-Petrodollar Coalition' between the principal military contractors and petroleum companies. As their environment became intertwined with the broader political realignment of OPEC and the industrial countries, the differential profits of these companies grew evermore dependent on the precarious interaction between rising oil prices and expanding arms exports emanating from successive Middle East 'energy conflicts'. At the same time, these companies were not passive bystanders. This is suggested firstly by the very close correlation existing between their arms deliveries to the Middle East and the region's [ABSTRACT FROM AUTHOR]

This paper uses a case study methodology and a Critical Theory framework to interpret corporate crimes committed by the transnational corporation Ferruzzi. Building upon the literature on the crisis of Fordism, the globalization of the economy and society, and corporate crime, it is argued that Ferruzzi was involved in a systematic violation of 1aws. The analysis points to the fact that these behaviors are endemic to capitalism as they are rooted in the contradiction between capital accumulation and substantive democracy in advanced Western societies. Democratic calls for the establishment of broader participation of subordinate classes in the direction of society create obstacles to the action of profit-seeking corporations. Corporations bypass these obstacles through illegal maneuvers which, today, are made possible by the transnational nature of their activities. [ABSTRACT FROM AUTHOR]

This article focuses on an interesting and important concept of inequality and, it would seem, one indicated by conventional thinking on this subject. But in view of the aspects just mentioned, exclusive preoccupation with inequality in this sense might lead to a rather one-sided view of what is really of concerns the people. The second kind of inequality would diverge from the first as a result of direct taxes and subsidies and also certain other factors, particularly monopoly profits and exploitation. To put the matter in somewhat different terms, what is in question here seems essentially to be a valuation problem-a-problem of how to value, for purposes of measuring inequality, the different commodities entering into "real" income. The author talks about the procedure of valuing the different commodities in accord with their market prices or, assuming a relatively effective market, their relative utilities. The author refers in his paper to the large question of the effect of taxation and other measures for the equalization of income or incentives.

In the present study a model is presented, which shows that capitalist economy stagnates as it produces more and more goods and services. Moreover, we have also tried to find out how open economy can make matured capitalist economy worse off and better off. We have applied here Marxian concept of continuous profit accumulation by increasing automation and Schumpeterian concept of product innovation and process innovation by capitalist entrepreneurs to raise profit. As new product is introduced, profit is made by recruiting more labor which raises real wage in the capitalist economy. But in process innovation, profit is made by increasing automation which reduces demand for labor and hence real wage. In early stage of capitalism, existing product base is small so effect of automation is low but as existing product base rises impact of automation dominates that of product innovation. Matured capitalist country outsources is industries to developing economies. The former is better off by having demographic dividend of the developing economies while the matured capitalist economies can be worse off if outsourced industries are too much labor intensive [ABSTRACT FROM AUTHOR]

In this paper, we employed triple bottom line (TBL) accounting and considered threats to cybersecurity in the context of natural gas and global supply chain sustainability. The global supply chain is a diverse assortment of contingent claims contracts and relationships that span the world. It contains both risks and benefits. In this study, consideration is given to the balance of consequences. We propose a sustainable economic model that preserves the positive dynamics of capitalism and accounting principles while improving collaboration between industry, landowners, and environmentalists to optimize return on profits for companies, provide royalties to landowners, and satisfy the planet's environmental concerns. Our TBL approach supports the need to preserve the best qualities of free enterprise and market-driven regulation profits while also providing social and environmental benefits. Our proposed approach is novel and may be helpful for decision makers in all sectors, from public to private. We have endeavored to make sufficiently objective and appropriate conclusions that guide how the model can be used in other sectors or by other decision makers. This review has several aims. First, we aim to understand the technical application of TBL optimization and to associate it with the use of mathematical and statistical analysis. Second, we present a fuzzy integrated linguistic operator weighted average application to better understand TBL and to strengthen the argument for its use. Finally, we debate issues inherent in applying analyses of this type with regard to stakeholder viewpoints and objectivity. [ABSTRACT FROM AUTHOR]

Purpose – There is little reason a priori to expect that a cooperative firm’s capital needs are different from a non-cooperative firm’s needs if the two firms are otherwise similar in function and size and operate within similar market economies. However, the notion that cooperatives face capital constraints that investor-owned firms (IOFs) do not is a persistent theme in the literature. The paper aims to discuss these issues. Design/methodology/approach – The authors revisit this hypothesis with an empirical examination of capital constraints in a panel data set of US agricultural supply and grain cooperatives and IOFs. Findings – The findings are mixed. While the authors find little to suggest that cooperatives face financial constraints on borrowing in the short run, relative to IOFs, the authors do find some evidence that for long-term investments, a capital constraint may exist. Originality/value – These short and long run differences have implications for the survival and growth of agricultural cooperatives. While in the short run, access to debt financing allows these firms to operative profitably, ultimately long-term large investments in technology and fixed assets will be required to maintain competitiveness in this industry. [ABSTRACT FROM AUTHOR]

The rough coincidence of the 50th anniversary of Milton Friedman's Sunday New York Times Magazine article, "The Social Responsibility of Business Is to Increase Its Profits," with today's movement advocating broader corporate purpose than maximizing shareholder value and stressing the public corporation's obligation to other stakeholders raises the questions: to whom is the corporation accountable and for what? This essay broadly distinguishes different governance structures that oversee the corporation's allocation and distributive decisions: on the one hand, how it goes about allocating investor capital and creating value; and on the other, whether it chooses to distribute the value it creates to stakeholders in ways that differ from the outcomes that would result from the labor and other various factor markets through which stakeholders provide their contributions. This distinction serves to underscore the difference between corporate governance, which effectively allocates accountability for the profitability of the corporation's business to the market, and real governance, which vests accountability for distributive decisions ultimately in elected officials. The author posts a warning against those who view today's purpose‐driven governance movement as a call for a shift back to a system of management and corporate governance that Alfred Chandler, in his iconic history of the development of the structure of large U.S. corporations, labeled "managerial capitalism." Such a solution, as Chandler's chronicles should warn us, are likely to leave us confronting the same problem with which his managerial capitalism left us: the replacement of the invisible hand of markets with the visible hand of a management hierarchy. And this in turn forces us back to the hard question: what systems hold Chandler's management hierarchy accountable for its performance? The author argues that corporate governance and markets should continue to hold management accountable for creating efficiency and value, and that real governance, and ultimately the electorate, continue to be responsible—and if anything, assume greater responsibility—for "redistributive" decisions that override factor market allocations. [ABSTRACT FROM AUTHOR]

Objectives: From 1997 to 2000, Philip Morris implemented Project Sunrise. This paper discusses the impact of this project on national and Philip Morris's cigarette unit sales, public opinion about smoking and secondhand tobacco smoke, and national prevalence trends for tobacco use. Study design: A qualitative archival content analysis of Project Sunrise from 1997 to 2000, and a descriptive statistical analysis of cigarette unit sales and operating profits, acceptability of smoking and secondhand tobacco smoke, and national prevalence trends for tobacco use from 1996 to 2006. Methods: Qualitative data sources related to Project Sunrise found on WebCat, Pubmed. corn, LexisNexis Academic and Philip Morris's website, and archived tobacco industry documents were analysed using NVivo Version 9.0. A descriptive statistical analysis of cigarette unit sales, public opinion about smoking and secondhand tobacco smoke, and national prevalence trends for tobacco use was undertaken. Results: Project Sunrise was a high-level strategic corporate plan to maintain profits that included four possible scenarios resulting in seven interwoven strategies. However, national prevalence rates for tobacco use declined, sales of national and Philip Morris cigarettes declined, operating profits remained at substantially lower levels after 2000 from 2001 to 2006, and a large majority of Americans agreed that there were significant health dangers associated with smoking and secondhand tobacco smoke. Conclusion: The impact of Project Sunrise, including countering the anti-tobacco movement, was less than successful in the USA. [ABSTRACT FROM AUTHOR]

It is well-established that human capital contributes to unequal levels of earnings mobility. Individuals with higher levels of human capital, typically measured through education, earn more on average and are privy to greater levels of upward change over time. Nevertheless, other factors may have an incremental effect over education, namely cognitive ability and the skill demands of employment. To deepen insight into whether these aspects contribute to earnings mobility over a four-year period, the present study examines positional change in Canada and Germany—two contexts typified as examples of liberal and coordinated market economies. A series of descriptive indices and relative change models assess how different measures of human capital are associated with earnings mobility. The results indicate that, while individuals with higher cognitive skills experience greater earnings stability and upward mobility in both countries, there is only an incremental effect of skills on mobility in Germany once we account for educational credentials. The results also provide evidence on the role of skill demands for earnings mobility; in both countries, advanced skills at work are associated with greater short-term mobility, even while controlling for cognitive ability and other factors. Together the results showcase how longitudinal data containing detailed measures of human capital allow for deeper insight into what facilitates earnings mobility. [ABSTRACT FROM AUTHOR]

The economic analysis of the power to tax and spend, or what Franz Oppenheimer called "the political means," is applied to democracies and to dictatorships. The constraints imposed by democracies and dictatorships on the "iron law of political redistribution" and the "law of hierarchical centralization" are examined. It is shown that the fiscal exploitation inherent in these two laws of political profit reaches its fullest potential in a dictatorship, where a single firm attempts to monopolize the government by forbidding competition to its rule. Democracy and capitalism are correlatives, since they both rest upon rights, which necessarily imply property. Both socialism and dictatorship destroy rights, the former by abolishing private ownership over capital and resources, the latter by forbidding the use of such resources for the purpose of competing against the ruling group. The greater the centralization of the State, the greater its capacity to expand its power; and the greater the scope of the State, the more economical it becomes to centralize the government, with force if necessary. Thus, dictatorship and socialism converge in despotism. [ABSTRACT FROM AUTHOR]

The scheme of reproduction occupies a central place in Marx's economic analysis of capitalism. This paper examines the analytical structure of the scheme in order to clarify, after some restatement, the nature of the theoretical solution it offers to some of the central issues raised in recent theories of growth and distribution. Of particular interest are questions concerning the possibility of steady growth in a capitalist economy and the determination of the rate of profits. It is shown that, for an economy in a state of reproduction, the scheme provides an internally consistent theory of the profit rate when the rate of exploitation is taken as given. The associated path of accumulation over time, derived under different assumptions concerning investment behavior, displays possible sources of imbalance, including those found by Harrod. The analysis is developed in terms of both labor values and prices of production. [ABSTRACT FROM AUTHOR]

Recent debates about the 1% vs. 99%, CEO compensation, minimum wage, and income inequality suggest an increasingly unfavorable division of economic gains for labor. Indeed, how capital and labor divide the gains from production is central to the study of political economy, particularly the impact of globalization and unionization. Yet, the prominent measures featured in the research to date, most notably labor compensation over GDP, are inadequate for studying the split of gains between labor and capital. We argue that the division of gains between labor and capital is more accurately and precisely conceptualized and measured by the ratio of labor compensation over operating corporate profits in the private sector. Using newly collected private-sector data from 17 industrial democracies over 30 years from 1981 to 2012, our analysis uncovers important patterns. First, labor compensation and corporate profits both rose in absolute terms over the last three decades, but the compensation-profit ratio experienced a sharp decline, meaning that the improvement was smaller for labor than capital. Second, rising economic openness and declining union density contributed to the fall of the compensation-profit ratio. Finally, there was a clear cross-national convergence toward declining compensation-profit ratio, rising openness, and shrinking labor unions. We conjecture that these results point to the movement of advanced industrial democracies toward a new capitalism equilibrium. [ABSTRACT FROM AUTHOR]

For decades futurists, academics and business experts have argued that automation, robots and other new technology would eliminate millions of jobs. Yet the workforce in the US has continued to grow, even if more slowly, to new heights. Work has changed, but the predicted 'end of work' failed to materialise even as technology has advanced, albeit unevenly. This article will argue that the answer to this apparent riddle is not to be found in analysing the technology itself, but in Marxist political economy. The progress of robots and related technology will be examined, but the argument is that the limits on technical progress in the actual production of goods and services lie in the turbulence of capitalism since the 1970s with its uneven profit rates. [ABSTRACT FROM AUTHOR]

The MEGA2 edition is a watershed in interpreting important aspects of Marx's oeuvre, but not all of them. It provides hints as to why Marx failed to complete his magnum opus, Capital, and informs about his doubts regarding the "law of motion" of capitalism centred on the "law of the falling tendency of the rate of profit" he was keen to establish. [ABSTRACT FROM AUTHOR]

The article focuses on the issue of business ethics, in context of the business enterprises in the U.S. The author also attempts to put the subject of business ethics in perspective by tracing the historical roots of some of the greater U.S. preoccupations with the ethics of business. The contemporary re-emergence of three issues are focused on; the tension between ethics and profits, the conflict between private gain and the public good, and the contrast between the results of capitalism and the intentions of businessmen. The author concludes that the contemporary revival of interest in business ethics can be viewed as part of an ongoing moral dialogue with deep secular and religious roots. It is noted that public scrutiny of the moral character of business decisions has played an essential part in the historical evolution of capitalism.

Scholars have long debated exactly why Marx felt that general gluts were not just possible, but inevitable. This article argues that Theories of Surplus Value anchored that necessity in the complex interconnectedness that characterizes capitalist production. There, Marx's criticism of Say's Law builds on a version of crisis theory that begins with raw material shortages in a leading sector. The disturbance is then transmitted through the many inter-industry linkages in the capitalist economy. What starts as a supply-side shock in a leading sector is transformed into a broad crisis of aggregate demand as workers are laid off and businesses fall into insolvency. This article argues that Marx's later discussion of other types of crises in Capital can be read as consistent with this approach. A severe profit squeeze in a leading sector (whether originating in intermediate good prices, market demand, rising wages or rising use of fixed capital) necessarily turns into a general glut. In this context, Say's Law becomes an irrelevant theorem concerning an imaginary economy. What Marx sees as fundamentally new under capitalism is not the use of money and the separation of sale and purchase, but massive interconnectedness. [ABSTRACT FROM AUTHOR]

The idea of engaging directly with management practice while retaining a strongly critical social science stance has become popular under the banner of critical performativity. This idea has yet to be applied to small firms, and it also needs specification: as usually stated, it lacks grounds within science to define with whom to engage and with what goals. In total, three themes are addressed: the nature of a ‘radical pluralist’ view of engagement, the distinct challenges in a small firm context and a set of three illustrations of possible lines of engagement. Engagement is both desirable and feasible, though large challenges remain, notably the demands of small-firm owners and the requirements of close engagement over a period of time. [ABSTRACT FROM AUTHOR]

Business ethics scholars have proposed strategies for mitigating the ill effects brought on by a wealth maximization business strategy by urging managers to either embrace corporate social responsibility (CSR) or to manage according to stakeholder theory. In this article I argue that these strategies are often ineffective in bringing about the behavior they promote because it is antithetical to the nature and logic of capitalism. I examine the organizing principles of capitalism and the role it assigns to capitalists, and juxtapose these with the behavior prescribed by three normative frameworks: strategic management theory (SMT), the CSR initiative, and stakeholder theory. Unlike the behaviors prescribed by the CSR initiative and stakeholder management theory, the behavior prescribed by SMT is consistent with the role of capitalists as defined by the organizing principles of capitalism, and SMT's "rules" have instilled habits that have, in turn, been able to mold managers' aspirations and purposes. CSR and stakeholder theory must not only combat the habits instilled by the entrenched SMT, they must also find some way of instilling habits that run contrary to those defined by the nature and logic of capitalism itself. [ABSTRACT FROM AUTHOR]

An increasing number of economists agree that modern market economies are subject to a growth imperative: zero growth is not a feasible state in the long run. This result is shown differently by various authors. Mathias Binswanger pretends to establish the growth imperative of modern market economies by making the link between money creation and firms' profits. If Binswanger's strictly positive minimal steady state growth solution is binding, so is the minimal growth derived from the money creation rule but the reverse is not true. In other words, it is sufficient to consider the money creation rule for the feasible solutions in his model; the link between firms' profits and money creation is missing. Nevertheless, the basic message of his model is not discredited: there is a growth imperative in capitalist economies regardless of risk considerations. [ABSTRACT FROM AUTHOR]

In post-Keynesian recent works the 'profit without investment' case has made its appearance as a particular accumulation regime, one claiming along with two others (the contractive and the expansive case) that it can account for the different conceivable dynamic patterns at work in financialised capitalism. Actually, profit without investment--or rather, profit beyond investment--is in the very nature of capitalism. It is not a special case. The dividend channel is an essential component of profit formation. We show that its enabling condition, and what at the same time limits its width, is firms' resort to debt. Beyond a certain point, the divorce between dividends and investment is such that firms' policies leave their viable domain--a domain bounded by their wishes to be self-financing. Past that point, any increase in profits runs into a 'glass ceiling' in terms of outlets for those profits. It is when the demands of finance (i.e., of shareholders) reach this limit that the three regimes identified in the literature make their appearance, including the one called 'profit without investment'. Seen in this light, these regimes are therefore all cases of profit without investment, ones that take on some reality and some plausibility when finance tries to drag profit without accumulation outside of its viable domain. [ABSTRACT FROM AUTHOR]

Two decades of aggressive neoliberalisation in Russia has failed to produce a uniform system of private property and profit-maximising enterprises. Instead, the complex interactions of multiple 'practices of property' that are pre-Soviet, Soviet and post-Soviet in origin, and not private property alone, have created a diverse economic landscape. Moreover, multiple practices of property have produced both capitalist economies (such as Moscow's early capitalist enterprises) and non-capitalist, ethically guided economies (such as the indigenous enterprises of Arctic reindeer herders). The persistence of alternative economic logics in Russia illustrates the limits of the role of private property in shaping the post-Soviet economy. [ABSTRACT FROM AUTHOR]

Many financial scandals that have happened recently were usually followed by manipulations in financial reports. This only further confirms how important are the information contained in financial reports. If they were not important there would be no need to present them erroneously. State regulatory framework and the accounting profession in the developed market economy countries reacted by striving to build up a better institutional framework for financial reporting to be characterised primarily by an enhanced role of the state in supervising financial reporting practices. In addition to standard financial analysis, financial analysts are increasingly applying some of the non-standard methods that may serve as warning indicators of the presence of creative accounting practice. Practical experiences have developed certain benchmark values that identify the need for additional research in case the values of studied indicators are sending warning signals, in order to avoid making misinformed business decisions. Quantitative warning indicators used by financial analysts are further supported by the so-called qualitative warning indicators which are describing events and activities that may point out at the possible presence of creative financial reporting. [ABSTRACT FROM AUTHOR]

For many organizations, such as museums, the lowest profit line, frequently used as a last performance test, does not exist. In these cases, both the financial performance and the impact of the services are difficult to measure. Still, it is important to know if all the museum resources are properly assigned and if these are used in such a way, so as to offer the maximum effect. [ABSTRACT FROM AUTHOR]

Since ought implies can, i.e., one cannot be obligated to do what one cannot do, the question of corporate responsibility cannot be discussed intelligibly without an inquiry into the range of corporate or managerial discretion. Hence, the moral relevance of a theory of the firm. Within classical or neo-classical economic theory, for instance, firms which act other than to maximize profit are eliminated. They cannot do otherwise, and thus either have no obligations at all or only the duty to maximize profit. The thesis of the Managerial Revolution, if true, establishes only that management is free from direct stockholder control. By asserting that corporations have responsibilities to do other than maximize profit, philosophers assume a wide degree of managerial discretion, without considering recent developments in the theory of the firm which suggest that new incentives and constraints radically restrict managerial liberty in a capitalist society. [ABSTRACT FROM AUTHOR]

This article describes the internalization of market norms as a potent form of domination. The growth of technical employment in advanced industrial societies has focused attention on the problematic integration of expert employees into the capitalist firm. Questions have been raised about their willingness to be subjected to bureaucratic authority, and to subordinate their technical and scientific orientation to the constraints imposed by the search for profit. Post-industrial theorists emphasize the transformative functions of technical professionals, and see their scientific knowledge as a power base to challenge both managerial authority and, ultimately, the ends of capitalist accumulation itself. The demands of profit will be replaced by professional goals as technically involved employees demand to expand the control they possess over their immediate tasks to include the overall strategy and structure of a company. Modern industrial engineering exists as an occupation only because employers need trusted employees to carry out the tasks of conception, design and supervision. The tension between technical expertise and profit maximization, inherent in the definition of the engineering profession, is continuously generated within the structure of the capitalist firm.

Almost everyone loves the idea of employee stock ownership plans (ESOPs). The concept of employee shareholders engaging in a type of "worker capitalism" where cooperation flourishes and everyone wants the same thing -- a higher stock price and growing corporate profits -- is intuitively appealing. Unfortunately, the ESOP fable of enhanced firm performance may often be based more on wishful thinking than hard analysis. We tested the reaction of the securities' market to announcements of 48 firms which created ESOPs as an employee benefit. Although short run positive stock price reactions do occur, there was no improvement for the firms in our sample in longer run industry-adjusted changes in operating performance. [ABSTRACT FROM AUTHOR]

The article presents an analysis and definition of the theory of profit. The author says that if analysis can reveal no distinctive function among the varied relations which the employer actually sustains to business, the inevitable conclusion must be that there is no logical basis for profit as a distinctive and coordinate share in distribution. The people are living under an economic regime in which mankind is more and more consciously engaged as a unit in an organized struggle to wrest from all nature as a unit the means of well-being. Man on the one side and nature on the other remain as in primitive times the primary factors in the economic struggle; and the dependence of man upon nature is recognized for his well-being as the fundamental economic principle -a principle both universal and perpetual. The author says that the productive process is predominantly social. He says that the successive stages in the evolution of modern capitalism may be viewed as stages in the development of industrial organization. Economists have called attention to the spontaneity of industrial organization in general, have pointed out the economic benefits resulting from it, and have enlarged upon its marvelous effectiveness in keeping the markets of the world well supplied with the different kinds of consumers' goods in nicely adjusted proportions.

This article defines some of the boundaries and limits within which a group of theories of profit could be constructed. Despite the immense difficulty of making any empirical dissection of the components of profit, profit theory and analysis always remain fascinating. The insatiable search for profit is still the basic driving force of a capitalist economy. The character, use, and source of profit is not the same throughout an economy. As a result, a recognition and analysis of these differences is very helpful. The small businessman is the protagonist featured in most of the traditional profit theories. The theory which describes profit as imputed wages, interest, and land rent was also based upon the small businessman. Professor J. Marchal says that the imputation of net profit, wages of management, and interest on the entrepreneur's own capital correspond to nothing real. In small business, the classical concept of profit as a combination of wages, interest, and rent for the owners is very relevant. The large corporation's profit is very different. Nothing can be imputed to profit for the wages of management, which are very small in relation to the operation of the whole company.