One view is that it is a fad. "Historically, corporations were understood to be responsible to a
complex web of constituencies, including employees, communities, society
at large, suppliers, and shareholders. But in the era of deregulation,
the interests of shareholders began to trump all the others.... In reality, there is nothing in any U.S. statute, federal or state, that requires corporations to maximize their profits." Earlier corporate leaders saw their roles differently. When did it all change? During the Reagan years.
Whose Corporations? Our Corporations! | BillMoyers.com
Not to boil it down to one problem here, but I can't help but think that the decline of labor unions has just exacerbated this problem. Unions were designed to keep firms in check, make sure that they were treating their workers fairly, and promoting employee benefits. The era of deregulation was also the demise of unions. Since then, we have seen less employee benefits (like medical care, pensions, etc.) and the government has had to step in to breach this gap. When the shareholder is the sole focus of a corporation, it loses its real goals, to create a well-functioning good or service AND to promote the well-being of its workers. I think this is lost in the "shareholder" era, and it may be that unions could have helped remedy this problem.
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