Shareholder and Stakeholder
Over the last decade, with the rapid development of business management, the Shareholders who are the effective owners of the company invest money into the business and want as much profit as possible as a return for their investment. Shareholders will engage manager to help them to run the business and make various decisions in different aspects in order to maximize potential wealth. There seems to be no doubt that a manager has a legal responsibility to shareholders. However, if the manager only considers the interests of shareholders, will the business be successful for a long time? Therefore, the theory of stakeholder enters the public consciousness. This essay aims to explain in addition to the shareholder, why it is also necessary for a manager to demonstrate responsibility to the various stakeholders. An integrated and clear definition of stakeholder will be introduced in the first paragraph. The content will show that stakeholders play different significant roles to help the firm to reach the long-run benefits in the second paragraph. Last but not the least, the third part of this thesis will utilize a negative example to reveal the bad influence if a manager only shoulder the responsibility to shareholder.
Stakeholders are all person or group which have various interests or concern upon the company and be involved in the daily routine of it, meanwhile they will also be affected by the economic, moral action processed by the firm. Customers, employees, business associates, the community and the natural environment are the representative members of stakeholders. For instance, Primark, a textile manufacture and clothing distribution industry in the UK divided its stakeholders into the form of external and internal. Employees are the internal stakeholder and suppliers, customers, trade unions, civil society groups, and the communities are the external stakeholder of the Primark.(Primark, 2011) An significant point...
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