Stakeholder theory

Stakeholders, Shareholders and Wealth Maximization V. Sivarama Krishnan, University of Central Oklahoma ABSTRACT This paper attempts reconciliation between the two somewhat extreme views espoused by the shareholder wealth maximization paradigm and the stakeholder theory. The stakeholder theory challenges the basic premise built into corporate finance theory, teaching and practice. Corporate finance theory, teaching and the typically recommended practice are all built on the premise that the

impact of the shareholder theory. The global scandals and crises which have been caused by the extreme interpretation of the shareholder theory have led to the rising of the stakeholder theory where the interests of the employees, the customers, and the local communities were taken into consideration and not been ignored as previously. Scandals at Enron, Starbucks, Google, and Samsung indicate towards the failure of the shareholder theory and triumph of stakeholder theory which lay principles that

Contents Executive Summary 3 1.1 Introduction to Blackmores 4 1.2 Industry & Activities 4 1.3 Blackmores Organisational Structure 5 1.4 Media Presence 5 1.5 Stakeholder theory 6 1.6 Blackmores Stakeholders 7 1.7 Corporate Identity Theory 8 1.8 Blackmores Corporate Identity 8 1.9 Corporate Identity Interpretation 11 1.10 Conclusion 12 References 12 Executive Summary

way of BHP and lose the confidence for BHP due to their failure of diligence responsibilities. The following paragraph on this essay will discuss and analyze whether BHP’s behaviour is ethical or unethical through shareholder and stakeholder theories. The shareholder theory was

Who should benefit, and at whose expense when running a business? Milton Friedman maintains that profit is the only true goal, benefitting the stockholders. However, R. Edward Freeman proposes that the needs of all a business’s stakeholders must be balanced when acting. I support Freeman’s view because the environment has changed since the time of Friedman. Milton Friedman believes the idea of businesses having some sort of responsibility to society is a baseless notion, and describes discussions

paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only

central questions in the field of business ethics. There are two approaches to answering such questions. The first one is Milton Friedman’s shareholder theory of management and the second one is Edwards Freeman’s “Stakeholder” theory of management, two different views about the purpose and aims of a business. Milton Friedman’s shareholder theory of management says that the purpose of a business is to make money for the owner or the stockholders of the business. Friedman says that there is only one

Omkar Vedpathak (940126-P152) The main stakeholders of football clubs, their 'stake' in the organization and legitimacy of their interests. Some European football clubs have in, approximately in the last three decades, developed from being relatively small local organizations, into global giants in terms of multi-million businesses supported and followed by millions of stakeholders from all over the world. How does one relate

1. Introduction “Corporate finance theory, teaching and the typically recommended practice at least in the US are all built on the premise that the primary goal of a corporation should be the maximization of shareholder value.” (Krishnan, 2009) One often stumbles upon such statements while reading about shareholders value or maximization of shareholders wealth. This is also a typical answer to questions such as “what is the best and primary objective of a company in a competitive market”

Freeman vs. Friedman In their theories of how a business should operate, R. Edward Freeman and Milton Friedman hold virtually opposite beliefs as to what businesses’ responsibilities should be. In favor of the Stakeholder theory, Freeman believes that any person or organization that has a “stake” in the business should also play a role of participation in the business’s actions and decisions. In the other corner of the ring stands Milton Friedman, who holds the belief that said business is only