March 18, 2013
BLE 215: Midterm
The difference between shareholder and stakeholder is that shareholders are individuals who own stock in a company in hopes of making a profit. On the other hand, stakeholders are individuals who have an interest in a company, or any organization and are affected by what happens within the institution based on rules. In this article, Joseph Johnston argues, “Stakeholder theory sounds good in social theory but will not work in practice.” In other words, the theory is saying that the “shareholder” is more crucial and important than the “stakeholder”, and I agree with the theory that Joseph Johnston has said. Shareholder in other words means the CEO of the company, and stakeholder are the one whoever is involved with the company. However, the shareholder doesn’t have to be participating inside of the company, it can be people from different industry or corporations. In the nowadays society, the shareholder plays a more important role than the stakeholder. They have to get along with the society, and what I mean by that is they have to have contact with financing, operations, government, control aspects, and consideration. This is what it has to include in order taking the company to success. Therefore, the main point that Joseph Johnston is trying to say is in the realities nowadays, you can’t just focus on one people anymore, you have to play as a team, you have to notice the society. Question 2
In this case, I agree with Steven Kellman’s analysis with cost/benefit, you can’t really apply this theory in the environment. The environment isn’t like any computer software where it follows the steps one by one. The society/environment may change every minute or it may not change for years, but you or I do not decide it. I believe that in some circumstances, even if the cost and benefit doesn’t weigh the same, the certain decision may still be right. For instance, in the analysis, it stated in an example that because they can’t find and arrest the actual perpetrator, they arrested an innocent man, where they also knew he’s innocent, because nobody know who the thieves are and believes that by punishing someone, it will have some deterrent effect, making the crime rate will decrease. Although this sounds really unacceptable, but think of this way, if bringing in one person can save hundreds or even more, this is morally right to be done. It means more differently than it sounds like.
In order to keep the value of corporate sustainability, it means it will require you to do as much as possible to assist the company to achieve its maximum value. What I mean by this is doing what you’re asked for is not enough, you’ll have to accomplish more than what you’re asked. The world is rotating and changing everyday. In order for people to keep up the pace nowadays, they’ll have to put more effort in and doing more than what you’re asked for. “When the time you feel your desire for success is just like you want to simply breath, you’ll eventually succeed.” This is also why the child in India rather work than go to school because they want to succeed, they don’t want to be poor anymore. Question 3
In Edward Freeman’s model of Stakeholder Analysis, it is necessary for the stakeholder to gain success for the company. This means creating values for customers, suppliers, employers and the community. For instance, the customer’s duty is to give out suggestions and comments regarding on the products from the company. The supplier’s duty is to determine the products quality and price. Moreover, the designated employer’s will keep track on the interest of the company and make it balance. Last but not least, the community will be the one to give permission for the firm to construct more potential areas. Therefore, in order to gain success, they must work together.
But on the other hand, it does have conflict with the fiduciary duties of management and the board of directors to maximize the...
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