On average, corporations aren't so bad

In response to my post over on the Creative Capitalism blog about

the vexing dilemma that:

1) Having multiple organizational goals can be a recipe for underperformance and waste,

but

2) Focusing exclusively on a single, simple goal like profit maximization or shareholder value can lead an organization terribly astray.

a commenter wrote:

Okay, let's address the vexing dilemma. Monitoring profit-maximisation in the long-term is hard. However people still keep investing in publicly-owned companies, and have been doing so for centuries despite other investment options. Therefore publicly-owned companies manage on average to address the agent-owner problem. Note that this is not the same as a claim that there never are agent-owner problems, it merely is a claim that on average, over the long-run, publicly-owned companies don't do as badly as the "dilemma" implies.

Dilemma addressed. Next question?

It's a great point. But I don't think it entirely addresses the dilemma. One of the reasons that publicly traded corporations have been an economic success "on average" is because over the years they've veered back and forth between trying to maximize profits/shareholder-value and emphasizing other goals. They're always trying to get the balance right and seldom succeeding for long. That's all I'm trying to say--that there's no simple, good-in-every-case answer for how a corporation ought to set its priorities.