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Can the goal of maximizing the value of the stock conflict with other goals, such as...

Can the goal of maximizing the value of the stock conflict with other goals, such as avoiding unethical or illegal behavior? Discuss in the context of customer satisfaction, employee safety, the environment, and the general good of the society and shareholder wealth maximization.

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Through maximizing the value of stock other goals could most certainly be ignored (unethical behavior, employee safety, etc.). Companies such as Enron, WorldCom, Tyco, and Adelphia all had issues develop because of more emphasis being put on the maximization of market value and value of stock. I’ll use Enron as an example, through use of accounting loopholes, special purpose entities, and poor financial reporting, Enron was able to hide billions of dollars in debt from failed deals and project from their board of directors and auditing committee. This is an example where many executives used unethical/illegal behavior to further the company. This caused many of Enron’s shareholders to become affected and file a $40 billion lawsuit.

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