In the case of Dodge v. Ford Motor Company, the Michigan Supreme Court ruled in favor of shareholder primacy. What was the decision? Question 20Answera.Henry Ford must operate Ford Motor Company primarily to maximize profit for its shareholders.b.Henry Ford must operate Ford Motor Company primarily for the benefit of creditors.c.Henry Ford must operate Ford Motor Company primarily for the benefit of its workers.d.Henry Ford must operate Ford Motor Company primarily to maximize profit for the directors.
Question
In the case of Dodge v. Ford Motor Company, the Michigan Supreme Court ruled in favor of shareholder primacy. What was the decision? Question 20Answera.Henry Ford must operate Ford Motor Company primarily to maximize profit for its shareholders.b.Henry Ford must operate Ford Motor Company primarily for the benefit of creditors.c.Henry Ford must operate Ford Motor Company primarily for the benefit of its workers.d.Henry Ford must operate Ford Motor Company primarily to maximize profit for the directors.
Solution
The answer is a. Henry Ford must operate Ford Motor Company primarily to maximize profit for its shareholders. In the case of Dodge v. Ford Motor Company, the Michigan Supreme Court held that a business corporation is organized primarily for the profit of the stockholders, as opposed to the community or its employees. The court's decision was that Henry Ford had to operate the Ford Motor Company with the primary goal of benefiting its shareholders, which in this case meant maximizing profit.
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