Grow the Pie: How Great Companies Deliver Both Purpose and Profit

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Cambridge University Press, Mar 26, 2020 - Business & Economics - 382 pages
A Financial Times Book of the Year 2020! What is a responsible business? Common wisdom is that it's one that sacrifices profit for social outcomes. But while it's crucial for companies to serve society, they also have a duty to generate profit for investors - savers, retirees, and pension funds. Based on the highest-quality evidence and real-life examples spanning industries and countries, Alex Edmans shows that it's not an either-or choice - companies can create both profit and social value. The most successful companies don't target profit directly, but are driven by purpose - the desire to serve a societal need and contribute to human betterment. The book explains how to embed purpose into practice so that it's more than just a mission statement, and discusses the critical role of working collaboratively with a company's investors, employees, and customers. Rigorous research also uncovers surprising results on how executive pay, shareholder activism, and share buybacks can be used for the common good.
 

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Contents

Introduction
1
The PieGrowing Mentality
15
Growing the Pie Doesnt Aim to Maximise Profits
38
Growing the Pie Doesnt Mean Growing the Enterprise
58
Does Pieconomics Work?
77
Incentives
99
Stewardship
135
Repurchases
166
Investors
225
Citizens
246
Growing the Pie More Widely
277
Conclusion
303
Appendix
317
Endnotes
325
Index
358
Copyright

HOW TO GROW THE PIE? PUTTING IT INTO PRACTICE
185

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About the author (2020)

Alex Edmans is Professor of Finance at London Business School and a leading authority on reforming business to serve the common good - but using solutions based on rigorous evidence and recognising the importance of both investors and stakeholders. He has spoken at the World Economic Forum in Davos, testified in the UK Parliament, presented to the World Bank Board of Directors as part of the Distinguished Speaker Series, and given the TED talk 'What to Trust in a Post-Truth World' and the TEDx talk 'The Social Responsibility of Business'. He also serves as Mercers School Memorial Professor of Business at Gresham College, London, where he gave a public lecture series on 'How Business Can Better Serve Society'. He has published in all the leading academic finance journals, written for the Financial Times, Wall Street Journal and Harvard Business Review, and appeared live on Bloomberg, BBC, CNBC, CNN, ITV, and Sky News.

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