Shareholder Primacy And Stakeholder Model

Can any business in the world act in everyone’s interests? The answer is no. Every individual in the world have different needs and wants, and it implies they all have different interests. This is why business cannot just act in every individual’s interests. This is the biggest issue that every corporation is struggling with. Should it be shareholders or stakeholders? There are quite few views to verify this question which are The Narrowest view, “Shareholder Primacy” and “Stakeholder Model”. The narrowest view says no matter what business does, the most important aim is to generate profit for business. However this essay will only discuss “Shareholder Primacy” and “Stakeholder Model”. Before discussing these views, do businesses really need …show more content…
This argument has two varieties which are: Businesses do not have necessary skills and experiences and they cannot afford to do anything except maximize profits (Winfield, 2014; 107). If both of these varieties are sound then it would provide very good reasons to believe in Shareholder Primacy. The one of the biggest social issues in the world is HIV/AIDs. Such businesses would not have skills and experiences to help these people but businesses will be able to help once they have generated enough profits to satisfy shareholders and remainder of profits will be used for charities. There are a lot of social issues that are not expected for businesses to overcome but it does not mean they are incapable of benefiting others. Do businesses really have social responsibilities? Corporate Social Responsibility is defined as follows: “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce as well as of the local community and society at large” (Baker, 2004). A definition of corporate social responsibility strongly advises businesses to behave ethically and try to contribute social benefits to other people “Economically”. Even though businesses do not have enough skills and experiences, they can still help societies and they are afforded to businesses. These reasons counter-argue variety of this …show more content…
Each individual, citizens in society have social duties. Before businesses to be considered as citizens, what is citizen? Oxford dictionary defines citizen as a legally recognized subject or national of a state or common wealth, either native or naturalized (“Citizen, n.”, 2014). Businesses are legal organization aiming to make profits. Thus in my point of view definition of a citizen meets the definition of a business. This implies businesses are citizens in a nation and therefore they do have civic duties to society. In support of this argument business has Corporate Social Responsibility. Mallen Baker defines corporate social responsibility as how companies manage the business processes to produce an overall positive impact on society (Baker, 2004). Corporate social responsibility supports these arguments by saying businesses have duty to have social responsibility and duty to act ethically. By saying businesses are citizens in a nation; committing corporate social responsibility is a very significant element to lead to sustainability and good corporate governance of a business. These ideas lead to the decision that businesses are citizens of society and therefore have duty to have social

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