Title

Excess Profits? A Cautionary Classroom Exercise

Document Type

Article

Publication/Presentation Date

1-2011

Academic Year

2011-2012

Abstract/Description

This paper presents a short classroom exercise to stimulate student discussion of the rights of shareholders versus the rights of stakeholders. Students are challenged to identify and evaluate their preconceived notions of what constitutes excessive profits. The exercise illustrates why the realization of a large return on investment cannot be used as prima facie evidence that a firm exploited employees, customers, or other stakeholders. This concept is illustrated using data from the pharmaceutical industry.

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