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How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective



Hecker, C. How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective. Journal of Contextual Economics – Schmollers Jahrbuch, 99999(), 1-30.
Hecker, Christian "How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective" Journal of Contextual Economics – Schmollers Jahrbuch 99999., 2024, 1-30.
Hecker, Christian (2024): How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 99999, iss. , 1-30, [online]


How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective

Hecker, Christian

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. (2024), Online First : pp. 1–30

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Christian Hecker, European Business Ethics Network Deutschland e.V. ,


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This article is based on Norman Bowie’s idea of a “profit-seeking paradox,” which states that companies have the best chance of making profits if they do not place profit-making as such at the centre of their activity, but instead pursue a stakeholder-oriented business policy that focuses on creating meaningful jobs and serving customers. In this contribution, Bowie’s theory is complemented by a macroeconomic perspective. On the basis of considerations by Keynes, Schumpeter, and Phelps, it is demonstrated how entrepreneurial activity that is not primarily oriented towards financial goals can unfold positive external effects, increasing the productivity of the economy as a whole and thereby also improving the profit opportunities of the respective companies. Otherwise, profit maximization that leads to the neglect of investment can impair the growth potential of the economy and thereby also affect firms’ prospects for profits.

Table of Contents

Section Title Page Action Price
By Christian Hecker: How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie’s Paradox of Profit from a Micro- and Macroeconomic Perspective 1
1. Introduction: From the “Hedonistic Paradox” to the “Profit-Seeking Paradox” 1
2. The Paradox of Profit at the Firm Level 2
2.1 Managerial Considerations behind Bowie’s Paradox of Profit 2
2.2 The Crucial Role of Motivation 4
3. Extension of the Paradox of Profit to the Macroeconomic Level 5
3.1 Preliminary Remarks 5
3.2 Schumpeter: The Role of Dynamic Entrepreneurs 5
3.3 Keynes: Entrepreneurship versus Speculation 7
3.4 Excursus: Keynes, Schumpeter, and Capitalism in Their Time 9
3.5 Edmund Phelps: A Theory of Dynamism 11
3.6 Ways of Classifying Entrepreneurial Motivation Based on Schumpeter, Keynes, and Phelps 12
4. 21st Century Corporate Management: Financial Benchmarks Instead of Entrepreneurial Motives 13
4.1 Lacking Attention for Thoughts about Motivation in Contemporary Economic Theory 13
4.2 How Financialization Has Changed Global Business Since the Late 20th Century 14
4.3 Shareholder Value Orientation and Financialization as a Motivational Revolution 15
4.4 The Profit-Seeking Paradox in Practise: Financialization as a Threat to the Real Economy 16
4.5 Case Study: Germany 18
5. The Profit-Seeking Paradox Today: Lessons for Business and the State 21
5.1 The Business Perspective 21
5.2 The Economic Policy Perspective I: Impact on the Achievement of Economic Policy Objectives 22
5.3 The Economic Policy Perspective II: Lessons from the Profit Paradox for Regulatory Policy 23
6. Conclusion 24
References 25