Maximise Stakeholder Interests

1411 Words 6 Pages
This essay will discuss topics on how a firm’s purpose is to maximise shareholder’s wealth and how by doing otherwise will affect the managerial focus of the firm and the balancing of conflicting interest amongst stakeholders. The other topic will discuss Vodacom and how conflicting stakeholder interests and how managers will use various solutions to attend these conflicts.
What is the purpose of a firm and why do firms have a purpose? Many believe that the purpose of a firm is just maximise profit but in an article by Rebecca Henderson and Eric Van der Steen the questions stated are answered by how the purpose of a firm is to appear to be invariably towards pro-social goal whilst the firm shows its ability to be socially engaged (Henderson & Van den Steen, 2015, p. 326). Stakeholders and shareholders invest in a company to gain returns but when then there is conflict there is high risk of a reduce in their returns (Bøhren, Josefsen, Steen, & Tankers, 2012, p. 2). A firm risks
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Majority of Vodacom is owned by Vodafone. Vodacom operates in various countries which include South Africa, Lesotho, Mozambique, Tanzania and the DRC (Company, 2013). Vodacom divides its business into three geographic segments which consists of corporate, international and South Africa. Vodacoms mission is to provide quality telecommunications services. The company values its customers and giving them the fastest internet best network. The company aswell has stakeholder issues which are both internal and external. External stakeholder issues are that of a change in exchange rates and the South African mobile termination rates which have proven to impact the overall profit which will reduce dividends. Internal stakeholder issues are that of management issues and that of competition from other telecommunications

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