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The role of the firm in society December 4, 2003 1. New challenges for corporations In recent years we have seen a chain of changes in the conduct of business only similar to the one brought by the industrial revolution era. However, this time not only technological advances but also political changes, social and environmental regulations and globalization issues have challenged the modern entrepreneur to adopt a model focused not only on a short term going but also on a long-term value creation strategy. Hansmann and Kraakman1 have named these models as "shareholder oriented model" and "stakeholder oriented model". Examples such as Enron, WorldCom and the one-week-old Telegraph2 case reflect the peculiar weakness of the "shareholder oriented model", where companies focus only on today's stock price performance. Moreover, this new scenario enhances the role of a "global citizen"3, recognizing the interests of the whole set of legitimate stakeholders - employees, suppliers, customers,...

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