Essay about Capitalists Vis A Vis Workers
Capitalists, which include entrepreneurs and investor-owned corporations, use their resources to create productive processes that will enable them to develop and sell goods and services in the marketplace at prices great enough to yield a higher return than that from other alternative investments. Employees are hired to produce the output. Employees are generally free to leave at any time, and capitalists would like to have the freedom to hire or terminate them, individually or collectively, as necessary to achieve their business purposes. Capitalists assume the risk that they will not be able to realize a positive yield from their investments and ideas. If they fail, their investments will be diminished or lost. They also expect that if they are successful in the marketplace, they will be able to keep these returns as a reward for taking the risk.
Q2. Explain how shareholder value decreases following unionization.
Shareholder returns are reduced following unionization. Firms involved in organizing drives and whose securities are publicly traded experience a reduction in share prices when an election petition is filed. (Shareholder Risk and Returns in Union and Nonunion Firms , n.d.) If unionization leads to lower shareholder returns, other things equal, as the agents of shareholders, top managers could be expected to try to reduce unionization in their firms, particularly if a substantial proportion of…