NATIONAL VALUE CREATION GOING BEYOND THE BOTTOM LINE

Abstract

The literature on the theory of the firm suggests that the primary function of management is the formulation and execution of policies, which lead to the maximization of shareholders’ wealth which is achieved when the market price of the company’s ordinary shares is maximized. Later on, the growing awareness of social responsibility which going beyond the profit is characterized by most of the business entities and it was included it into their business agenda since with an undertaking of it’s important to develop an interact with society and to get the social support of society for survival of the business. This study reviews the national value creations of corporate sector in Sri Lanka as a part of their social responsibility which is beyond the concept of profit maximization. Twenty listed public companies were selected and their social contributions in terms of community development, environmental protection, employees’ welfare and addition to government revenue were evaluated to assess their national value creations. The study found that all companies covered in the sample have voluntarily contributed to various social and community development projects going beyond the concept of profit maximization.

Keywords: Shareholders, Social Responsibility, National Value Creations

For full Paper: fmscresearch@sjp.ac.lk