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Essay / Research Paper Abstract
This 8 page paper examins shareholder theory, stakeholder theory and tinged shareholder theory. After considering the theories and their meaning they are applied to a real company; British telecom to argue that a tinged shareholder approach is being taken. The bibliography cites 6 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEsharth.rtf
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Unformatted sample text from the term paper:
and that of stakeholder theory. However, these may also be seen as two extremes and in reality neither of these in their pure form are commonplace. Indeed, in looking at
large modern corporations, such as British Telecom, a new model may emerge, that of the tinged shareholder theory that can be seen as a cross between the two. To consider
if this is really the case the first step is to look at what shareholder theory is and what stakeholder theory states. The traditional role of business has been
to create a profit. Indeed, if it were not for the profit incentive very few businesses would have developed and emerged. As the shareholders are the ultimate owners of
business it is this category of person that will benefit form the profits made by the business. This is the root of shareholder theory.
Shareholder theory which is also known as shareholder wealth maximisation, states that it is the shareholder who is the principle concern of the organisation (Dobson, 1999). A proponent
of this school of thought was Milton Freidman, a highly regarded economist, capitalist and Nobel prize winner (Chryssides et al, 1999). Friedman had a simple view on the responsibility of
a company; that businesses have only one social responsibility and that is the responsibility to their shareholders or owners; the increasing of their profits (Chryssides et al, 1999).
The effect of this statement is obvious, it denies that there is any further responsibility save that of the owners of the business (Chryssides
et a, 1999, Dobson, 1999). This argument is not quite as simple as it seems. It does not deny the existence of social responsibility, but places a very specialised perception
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