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'A manager's responsibility should be to the shareholders alone.' Critically assess this view and consider the roles of stakeholders in a business.

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Introduction

'A manager's responsibility should be to the shareholders alone.' Critically assess this view and consider the roles of stakeholders in a business. 'All businesses are affected by the environment in which they operate.' (Marcouse. I 2003 P489) This environment is mainly composing by two groups: shareholders and stakeholders. The overarching business practices of large, publicly traded, companies are typically divided into two categories: shareholder-driven or stakeholder-driven. The shareholder-driven model for business has been overwhelmingly for a long time where most managers believe that their responsibility should be to the shareholders alone, which means managers' mission is to maximize shareholder value. But, as the human civilization is developing, in recent years, people expect to know more about the business organization rather than just purchase the products and services from the business. All managers are faced with real or imagined conflicts of interest or competing demands for time and resources, between shareholders and stakeholders. In this essay, the shareholder's and stakeholders' definition will be outlined. It is also provides the fully explanation of the roles of stakeholders in a business. Finally, the summary that how could business deals with the relationship between shareholders and rest of stakeholders purposefully, befittingly and valuably will also be concluded. The shareholder means the owner of the company. Shareholders are part of stakeholders; 'they provide the risk of capital and require a return on their investment.' ...read more.

Middle

challenging job, so that they could obtain a chance for promotion or prove their personal values; they also want to work for a business which they could put their trust on, thus they will lose their jobs. Firms should make effort to provide job satisfaction, otherwise staffs would not happy. Therefore, there is low productivity and workers might decide to leave and find work somewhere else or can even go on strike. TOYOTA plc. conducted employee benefit plans to provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment. Making profit is the most important objective of a business. Customers are who the business' products and services are selling for. Customer is 'sovereign'. Business only could make money from its customers. 'No business can survive for long if its customers are not satisfied with its products and services.' (Ryan. J & Richards. J 1991 P217) BBC stated that their audiences are at the heart of everything they do in its Annual Report and Accounts 2002/2003. Customers want to get maximum satisfaction with lowest possible cost; they also want to be sure that the products that are being sold to them are of good quality and do not become useless after a certain period of time. ...read more.

Conclusion

The BOC Group plc. has set up The BOC Foundation for the Environment since 1990; and, with its partners, has funded nearly 120 environment projects since then to the tune of more than �12 million. These are good ways to become more widely known throughout the area because the words have spread that this company cares for the people and environment. In the old times, companies were created to produce and to sell, in other words to create money. As a result of this, their ideals are the simple purpose of do business that can generate money which means to satisfy the needs of its shareholders and provide money for them. In recent times, the companies have changed. The new style of companies have to have a different perspective, if they want to succeed in the new business market, they have to take into account two important factors when their managers are making decision. One is their economical wealth -shareholders- and another one is their implication towards the society -stakeholders-. 'The corporation cannot -and should not- survive if it does not take responsibility for the welfare of all of its constituents, and for the well-being of the larger society within which it operates.' ( Post. J, Preston. L & Sachs. S 2002 P16-17) However, a firm may not possible to satisfy all interest groups; sometimes it will result in conflicts. By given information, resources, obligations, managers must decide what is more important for the business when they are making decisions. ...read more.

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