Shareholder Theory Vs. The Competing Ideas Of Stakeholders Theories

946 WordsDec 15, 20154 Pages
Business development really relies on two parties, the buyer and the seller. without either of them you can never have a transaction. Today I am going to examine a few proponents to this business cycle in relevance to shareholder theories versus the competing ideas of stakeholders theories. I will not only develop a basis of each, I will take a deeper look into what the sole responsibility and how these action may affect business as a whole. Finally I will take time to examine each and conclude with a personal justification to each. To make a profit, that 's what most would say is the end goal in every business for the most part. Shareholder theory also related with stockholder theory providing a main emphasis on maximizing profit. Maximize profit within the corporation with the the help of the appointed executives within the company. This theory avoid the aspect of moral obligations and or socially responsible on the company 's dime. Much of this is to leave the company with smaller cost, cheaper goods and finally hopefully a bigger customer base in the end due to lower cost. Products may be built cheaper rather than spending extra on certain aspects. An easy example of this can is a company going with cheaper steel versus high grade steel because longevity is not a factor. While the sole emphasis within the shareholder theory is to maximize profit, Stakeholders theory repeats that single idea but also add the responsibility label to it. Stakeholder theory is to create

More about Shareholder Theory Vs. The Competing Ideas Of Stakeholders Theories

Open Document