March 18, 2013
BLE 215: Midterm
Question 1
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