“Be shepherds of God’s flock that is under your care, watching over them-not because you must, but because you are willing, as God wants you to be; not pursuing dishonest gain, but eager to serve”. 1 Peter 5:2, NIV. Even though Peter was one of the 12 disciples that witnessed Jesus die on the cross, be resurrected, and His Transfiguration, Peter still identified himself as a fellow elder. It was Peters way of managing through a covenantal relationship. Managing through a covenantal relationship is harder, it takes longer to see the results, but the results create long term value. Negative management my get results quicker, but long term gains are lost through resistance, …show more content…
Therefore, a manager, as a fiduciary, must prioritize profits over the interest of others. Studies have shown that managers engage in negative and self-interest behavior at the expense of stakeholders. This is largely dependent upon a manager who owns stock in the business and the view of the external or internal stakeholders (Poole et al., 2003). Managers that own stock in the business tend to act as agents and put emphasis on long-term capital gain. These managers focus on a separation between operations and stakeholders in order to increase value. Focusing on stakeholders may promote self-interest in status or perks. Managers that do not own stock in the business tend to focus on internal stakeholders in order to increase business value. Managers that put sole priority on internal stakeholders create diversity, increased employee moral and production but have a negligible impact on customers, community, or other external market and non-market stakeholders (Chung et al., 20120). Both attitudes towards management will increase profits, but will lack in maximizing the value of a …show more content…
That is to say, no one stakeholder has priority over another, and managers must balance the interests of all stakeholders. As a stakeholder, managers will better understand the interests of the stakeholders and avoid prioritizing one interest over another. This includes shareholders as they are also considered a stakeholder. Long term capital stockholder gains and business value will be maximized when managers consider the sum of all stakeholder interests and welfare (Kacperczyk 2009). This view will allow a manager a broader view of all stakeholders and the covenantal relationship they must have in order to maximize value in the business. Managers will create mutual accountability with internal stakeholders and mutual trust with external stakeholders. This will lead managers to avoid self-interest practices that ultimately increase costs and reduce shareholder