MBA-trained executives spread market-value maximization as a right and legitimate goal

Evidence

It is also plausible though I know of no direct evidence on the point that when the students who graduated with their MBAs from American business schools from the 1960s on came to occupy senior positions in corporations, they would have remembered at least some of what they had been taught in courses on the new financial economics. They would thus know that the goal of market-value maximization could be defended as being right, as well as being career-enhancing and wealth-enlarging. Many people were exposed to financial economics in the course of studying for the MBA degree. By the end of the 1990s, U.S. business schools were awarding about 100,000 MBAs a year (Skapinker 2002). The growing prestige of financial economics and the increasing emphasis in American corporate life on market-value maximization may thus have been to at least some degree mutually self-reinforcing. — Donald MacKenzie, An Engine, Not a Camera, 1177

Categorization

• XREF: The indirect performativity channel via management education — extrapolates the thesis from markets to corporate governance. — connects to: Modigliani-Miller made market-value maximization the test of corporate investment — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1171; Finance theory’s investor-centric view shaped American corporate governance toward value maximization — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1173
• QUESTION: The mutual self-reinforcement loop (theory prestige <-> corporate practice) is posed as plausible-but-unproven, an empirical opening worth pressing.

Broader Connections

• Finance theory’s investor-centric view shaped American corporate governance toward value maximization #corroborates (0.90) — Donald MacKenzie, An Engine, Not a Camera, 1173