I have just two questions please answer them ASAP In One sitting ... Please make
ID: 432346 • Letter: I
Question
I have just two questions please answer them ASAP In One sitting... Please make the answer short and correct and show your thoughts... Please do not copy from the internet.
1- How does the author of this article explain that the shareholder theory requires no ethical reasoning? is this criticism valid? if yes-- why? if No----why not?
2- why does use of the shareholder theory prevent effective resolution of the 13 common business practices listed in this article?
Reading are as below:
The Social Responsibility.of Management: A Critique of the Shareholder Paradigm and Defense of Stakeholder Primacy [Response to The Social Responsibility of Management: A Critique of the Stakehalder Paradigm and Defense of Shareholder Primacy by Philip R.P. Coelho, James E. McClure, and John A. Spry] Frederick R. Post, University of Toledo "Shareholder Theory allows management to ignore the interests of the other constituencies while pursuing its own narrow self-interest under the guise (the ethical facade) ofpromoting the interests of the shareholder owners. The Shareholder Theory does not provide any relistic counterweight against management abuse. The Enron example strengthens the arguments for the use of Stakehoider theory and exposes the utter failure of the ShareholderExplanation / Answer
1. In my views, stakeholder theory had been formulated with the objective to make the business accountable to its key stakeholders. Hence, instrumental power and normative validity comes under the purview of this theory. Often the self-interested decisions are overpowered by the common objective of maximizing business profits. Hence, under the theory of stakeholder management, the management has been given adequate powers to resolve conflicts among stakeholders because as per this theory, stakeholder is the most critical entity and must require definite ethical reasoning. The stakeholder needs to channelize his efforts towards the benefits of the business but these efforts must be aligned to the ethical way of dealing with things. This sanitizes the business and maintains its goodwill in the market.
In short-term perspective, the inclusion and agreement of the stakeholders is important for quick decision making. So, the shareholders need to be ethical and morally right. For long-term perspective, the faith of stakeholders in the business offering helps in creating goodwill for the company. So, we can conclude that social responsibility of shareholders is critical for smooth running of business.
2. Intangible properties of a business are the goodwill, IP rights, licenses as well as the dedicated customer lists. The tangible properties of business are the products, its resources and the infrastructure. A shareholder cannot be considered as a passive beneficiary of such property. This is because all activities that a business undertakes, prioritizes the shareholders needs and views. The receptiveness and acceptability of the shareholders is one, which can make or mar business of an individual or organization, as a whole. Hence shareholders occupy the central stage in any business model. Their morality and principles helps in keeping the business running in the right direction. So, if the stakeholder theory is intact in any company, it need not worry about any kind of illegal or unethical practices.