Henry Ford, majority shareholder of the Ford Motor Company, announced that rather than pay a special dividend to the company's shareholders, he was going to reinvest the accumulated earnings in order to expand the company and hire more workers. He further indicated that he wished to lower the price of the Model T car to make it more accessible to the general public. Two minority shareholders, John and Horace Dodge, sued to require payment of the dividend. The court upheld management's right to make decisions for the benefit of the company; however, the court said that "the corporation is a business, not a charity," and found for the Dodges because Henry Ford's decision was to benefit the public instead of shareholders.

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Should a corporation act solely to maximize shareholder wealth?

How should a corporation balance corporate social responsibility with shareholder interests?