This essay was written in response to the theme of this year's Academy of Management meeting, "Green Management Matters." I assert that firms should adopt "green management" practices only if such activities complement the organization's business- and corporate-level strategies and ultimately enhance profitability or shareholder wealth. To illustrate this I outline an economic/strategic perspec…
We address the debate about whether firms should engage in socially responsible behavior by proposing a theoretical model in which the supply of and demand for socially responsible investment opportunities determine whether these activities will improve, reduce, or have no impact on a firm's market value. The theory shows that managers in publicly traded firms might fund socially responsible ac…