Stakeholder vs Shareholder

Topics: Stakeholder, Shareholder, Stock Pages: 2 (833 words) Published: October 8, 2012
Stakeholders vs. Shareholders

The definition of business strategy is a long term plan of action designed to achieve a particular goal or set of goals or objectives. Stakeholder is a person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies. Shareholder is someone who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. Shareholder concept is a form of decision making around the business centered around the objectives of the shareholders. Their main aim is growth and maximization of profit. On the other side there is the stakeholder’s concept which is centered around balancing the objectives of the stakeholders. In my opinion, in today’s world it is where the stakeholders groups have more and more power it is better to have a stakeholder’s approach rather than a shareholder’s one. A lot of businesses use the shareholder approach because its aim is to maximize profit and grow the firm. I am not saying that this is the wrong way for Greggs. It has worked in the past for many successful businesses. In my opinion, the biggest benefit is the aim itself. It pushes the business and it employees to work towards something bigger and more successful. Some people argue that the shareholder approach is more honest and ethical. For example, a business says it is going to focus on completing its aims no matter how it is going to affect its stakeholders. And that is what it does, there are no ‘side missions’ or distractions for the employees. The business focuses on hard work rather than employees’ benefits or other stakeholder issues. People also argue that by benefiting the shareholders rather than the stakeholders, the shareholders will generate more profit which will lead to possible...
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