1. Compare and contrast stakeholder and stockholder theories. Discuss how each relates to ethics and regulation.
There has been an ongoing debate on for answering the question, “for whose benefit and at whose coast the corporation should be managed?” (Saint & Tripathy). Therefore, to answer this question there are many researchers who provide different arguments to support their theories. Some of them, they argue that the merely purpose of a company is to maximize profit for the stockholders /shareholders. …show more content…
Different business schools and researchers have been strongly arguing in favor of this theory. They express that the solely purposes of a business is to maximize profit and keep the interest and benefits of shareholders. (Admin, 2013) Managers are liable for profit maximization and keeping benefits of the shareholders. Hence, managers have fiduciary relationship with the shareholders. This implies that, managers’ objective is to run the business and to make profit by adhering to the basic rule of the society and law. In this case, shareholder theory emphasizes their profit making rather than societal interest or responsibilities.
Where as, stakeholder theory states that the purposes of a corporation have the broader aspect of serving the societal interest rather than focusing merely on maximizing the shareholder profit. (Saint & Tripathy). This theory suggests that managers are morally liable to balance and harmonize the benefits of stakeholders.
The primary objective of a corporation is “Corporate Social Responsibility” (Admin, 2013). This theory expresses that corporations are there to serve societal benefits, by prioritizing the legal and ethical aspect of the …show more content…
Particular Moral Principles and Judgment: it is the third level of the normative theories; it emphasizes on moral judgment of a particular action based on their relevant ethical code.
Post defining ethics and level of normative ethics, then what are the different types of Normative Ethics Theories: (academicroom.com, 2016)
When we are talking about Normative Ethics theories, there has been debate and different opinions to answer moral questions. Among these different opinions on how answer these moral questions the most outstanding approaches are as follows:
2.1 Virtue ethics Theories: refers to ethical concerns about the individual characteristic of a person than on a specific action. It emphases on “what makes a good person rather than what makes a good action.” (Ethics explained)
2.2 Deontology Theories: These theories argue that the morality of an act is not judge by its consequences rather by the action itself. It focuses on the action itself “what is write” not on the consequence “what is good.” Hence it is concerned about the moral obligations and duties. Immanuel Kant has written the most remarkable deontological theories known as Categorical imperative. E.g. If Mr. A hide in his home Mr. B (Jewish Person) from the terrorist, and if the terrorist come and ask Mr. A, if there are any Jewish person in his house. So Mr. A want to save Mr. B’s life and said I don’t have anyone. In this context, a person lies to save someone’s life. Hence, in the Deontological theory