Stakeholder versus shareholder essay

Shareholder - What's the Difference? One of the most important important distinctions when discussing business practices and business ethics is that between stakeholders and shareholders.

Stakeholder versus shareholder essay

Stakeholder versus shareholder essay

What is the difference between a shareholder and a stakeholder? Shareholders are always stakeholders in a corporation, but stakeholders are not always shareholders. A shareholder owns part of a public company through shares of stock hence the namewhile a stakeholder has an interest in the performance of a company for reasons other than stock performance or appreciation.

Corporate Social Responsibility The field of corporate social responsibility CSR has encouraged companies to take the interests of all stakeholders into consideration during their decision-making processes, instead of making choices based solely upon the interests of shareholders.

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The general public is one such external stakeholder now considered under CSR governance. When a company carries out operations that could increase environmental pollution or take away a green space within a community, for example, the public at large is affected.

Such decisions may be right for increasing shareholder profits, but stakeholders could be impacted negatively. Therefore, CSR creates a climate for corporations to make choices that protect social welfare, often using methods that reach far beyond legal and regulatory requirements.A shareholder owns part of a public company through shares of stock (hence the name), while a stakeholder has an interest in the performance of a company for reasons other than stock performance.

The shareholder can then sell of their stock in that company for a profit, and move on to their next investment. Stakeholders, however, are on the hook for the company's long term success, and when that company goes belly up or has to lay off workers the next year, it is the long term stakeholders who suffer.

Stakeholder theory may be more conducive than shareholder theory to curbing company impropriety.

Who are Stakeholders?

“The primary role of management is to maximize the wealth of the shareholder. ” “Financial management should include not only a concern for profit Shareholder vs Stakeholder Value - Assignment Example. On In Assignment Sample We will write a custom essay sample on Any topic specifically for you For Only $/page.

order now. Stakeholder versus Shareholder Stakeholder theory thinks that the enterprise is a series of contracts with various stakeholders to form various stakeholder consultations, the outcome of a transaction, whether investors, managers, employees, customers, suppliers, or government departments, community, etc., they are enterprise-specific .

Stakeholder theory thinks that the enterprise is a series of contracts with various stakeholders to form various stakeholder consultations, the outcome of a transaction, whether investors, managers, employees, customers, suppliers, or government departments, community, etc., they are enterprise-specific investments and bear the risks.

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