It doesn't have to be a nonprofit. There is nothing wrong with turning a profit. The problem is when the company's only goal is ever-increasing profit and they are willing to sacrifice the wellbeing of their employees, customers, and community to achieve it.
In the context you are using it, "profit" has a very specific meaning that's a little incongruent with what you're trying to say.
In that context, "profit" is the idea that earnings above cost are distributed to shareholders. The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.
From a stock price perspective, it will just be too tempting.
Nonprofits are disallowed from distributing earnings above cost or any other profit mechanism. While they might have their own set of pathologies, they're immune to the one I've described, to the best of my understanding.
Isn’t it possible to maintain ownership among founders and initial investors and maintain a minority share (<50%) of public stock? Although there’s nothing wrong with staying entirely private either.
It seems almost impossible to run a public company without having the place be taken over by bean counters these days.
> The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.
There are all sorts of ways to defend against a hostile takeover like this. I already mentioned Zuckerberg having majority control of the voting shares despite the company being public. There was also the attempted takeover of Netflix a decade ago that was prevented with a poison pill to issue more shares.
This is relatively new behaviour that only showed up around fifteen years ago, during the crash. Before then publicly traded companies such as DuPont or IBM would settle for a very gradual increase if it meant they had a stable market and dependable revenue stream. Especially if they had majority control of that market, since they could already squeeze customers for whatever amount they wanted, as Bell and Microsoft did. It was the smaller volatile companies like Keurig that disregarded five and ten year market projections and went for massive market expansion and quarterly or yearly profit increases because they were competing against giants in their respective or adjacent industries and needed to grow big enough fast enough not to be squashed. Between 2000 and 2008 the DOW and NASDAQ indexes stayed around the same level, then they cratered in 2008, and by 2011 they just started going up and up and up like they had back between 1982 and 1989. Except so far we're twelve years in and it hasn't slowed down, unlike the slowdown that started in 1987.
Companies changed up the way they did things starting in 2008 in order to survive, but sticking to that short term panic survival tactic is coming to a head. They've done almost everything possible in order to ensure growth, but the public just can't handle it and things are starting to collapse under the weight of near maximum monetization.
Why should they? Why does there need to be a dichotomy between doing something good and living in poverty, or else do everything possible to squeeze out the next short-term dollar. It strikes me as a profound failure of imagination to think there's no possible way to structure our economy where more companies could pursue profit in balance with other goals that can not directly be translated into next quarter's P&L statement.
Hence the '/have to', I'm not saying they philosophically or morally 'should' - I'm not commenting on that at all - I'm saying they have a duty to 'maximise shareholder value', a legal obligation to owners to (aim to) make as much money for them as possible, basically.
A privately owned company can do as it (that is: its owner(s) without state oversight) wishes.
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If you want me to comment on the philosophy or morals of it though, I suppose I think 'meh, whatever' - a private company is free to spring up and compete, free of public shareholders and free to maximise customer satisfaction instead. Of course it's easy to say 'free to spring up', and really there are all sorts of barriers to entry in many almost monopolistic markets, but that's rather a separate issue I think - it's just as much an issue for any less customer-oriented, perhaps public or wannabe public, company trying to compete.
The idea that execs of public companies have a legal requirement to maximize profit for shareholders, which is false and based on some misunderstandings of actual requirements, has been frequently stated (at least by commenters and pundits) as justification for companies taking awful and inhumane actions. ("Frequently repeated" makes it a meme; the word doesn't just mean image macros.)
The "fiduciary duty" rule that actually exists simply means (as I understand it) that execs can't legally enrich themselves at the company's expense beyond their agreed-upon compensation, without the approval of shareholders/the board.
So no; "every for-profit company" should not and does not have to take steps to maximize profit at the expense of their employees, their customers, and the public at large. Frankly, many of the ways they currently do this either are already or should be illegal, and are definitely immoral and detrimental to a healthy and functioning society and economy.
No, it doesn't have to be every public company either. Meta might be a for-profit public company, but Zuckerberg still has the majority of voting shares. If he wanted to get rid of the annoying IG "feature" that this blog describes, no one could stop him. He could prioritize the long term health of the company over their quarterly results. He is the one that is ultimately making the decision, not the public shareholders.
