Distinguish Between Shareholder and Stakeholder in a Business Context. Comment on the Influence of Shareholders on the Management of a Company and Its Allocation of Rewards.

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This paper specifically tries to distinguish between shareholder and stakeholder in business context. Firstly, there will be analysed main ideas of stakeholder theory, main principles of it. Secondly, the importance and characteristics of stakeholder interdependence will be shown. Thirdly, clear identification of main stakeholder groups and relationship between those groups will be outlined. In order, to distinguish shareholders from other stakeholders there will be paragraph analysing identity of this group. This analysis is followed by exceptionally important rights of shareholders which are giving them power to influence both company’s direction and through this other stakeholders.

Stakeholder theory and concept
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The benefits of being a shareholder include receiving dividends for each share as determined by the Board of Directors.
It is important to mention at this stage of this paper that Freeman’s stakeholder theory mentioned above proposed extended focus of managers beyond traditional interest group of shareholders, in order to understand expectations, needs and values of groups which where perceived external to the organization. In this sense, stakeholders of a company can be defined as individuals, their groups or agencies that, either voluntarily or involuntarily, takes part in wealth-creating capacity and activities, and who will be or are benefited from company or can also be its risk bearers. Stakeholder theory has both normative (moral/ ethical) and instrumental (profit/ wealth enhancing) implications. These strategic approaches can be regarded as a responsibility to meet claims of all stakeholders and/ or as a means to maximize organizational wealth. (Donaldson and Preston, 1995).

Shareholder rights
In order to distinguish shareholders from other stakeholders it has to be outlined some certain exceptional rights of this group to influence company’s future and management. In this assignment there are briefly outlined main rights of shareholders.
Shareholders have right to attend and vote at General Meeting. The right to vote is extremely important as it gives
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