Based upon the content in Topic 1, why do businesses focus their attention on maximizing shareholder value rather than just maximizing profits?

Based on Topic 1, businesses might focus their attention on maximizing shareholder value rather than just maximizing profits as a result of the type of company structure they have.  For instance, if the business is a corporation, then the maximizing value may be the best way to ensure profits and longevity. On the flip side, if the business is not a corporation but a partnership or sole proprietorship value is created through maximizing of profit--as with the lemonade stand. Finally, there are other reasons people own businesses. Some businesses have goals that are less concerned with profits and more concerned with the shareholder, or proprietor vision. Non-profits are many times a great example of this. The goal of "Feed the World International" is not maximizing profits but to feed as many starving people as possible. While the bottom line is a necessary goal to remain in business making a profit is not met by monetary means but through the success of achieving a certain number of feed individuals. Since this topic focuses on types of business, and how finance is "the heart" of business further reading would be necessary for any extended elaboration.

Based upon the content in Topic 2, why do some experts consider maximizing shareholder value or wealth a dumb idea?

Based upon the content in Topic 2 the reason some experts consider maximizing shareholder value or wealth to be a dumb idea are problems such as externalities--putting maximizing shareholder value about society, the principle-agent problem--agents tend to feather their own nest perks--CEO's driving expensive company cars...etc, and shirking--not doing what they should due to a lack of personal benefit. Further, implementing such structure resulted in the financial crisis of 2008. In addition, some critics of corporations charge that the goal of shareholder wealth maximization is too narrow for the good of society contending that corporations should instead act in a socially responsible manner since society many times foots the bill for externalities.  The paper of Jack Welch, former CEO of GE, caused shareholder capitalism in 1976. Executive compensation exposed while corporate performance declined.  Maximizing shareholder value turned out to be the very beginnings of the disease it purported to be the cure of. Welch now renounces the paper and supports customers as the needed focus of companies and not maximizing shareholder value. Customer focus saved the makers of Tylenol and created the tamper proof bottle.  Other businesses that successfully use customer centered business structure are Proctor and Gamble and Apple.  The conclusion is that centering on the customer has the end result of maximizing shareholder value while centering on shareholder value is a death sentence for most companies. 

What should be changed to encourage firms to consider shifting their focus away from maximizing shareholder value? 

The competitive nature of the financial goal, while sometimes producing socially irresponsible corporate behavior, is also largely responsible for the economic well-being that our society enjoys. Education is what works best. However, after the fall of companies such as Enron, policies of protection have been put in place. After the 2008 crisis it was thought that the focus would change, unfortunately, today many of the same financial practices that lead to the crises have been re introduced under other names. Who knows it may take a revolution before the lesson is learned.  The love of money is still alive and well, and as long as people can make money from the suffering of others the tendency to maximize shareholder value no matter what the cost of the society will prevail.