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Essay / Research Paper Abstract
This 7 page paper considers the argument that corporations should only be answerable to shareholders, looking at the arguments that support this as well as opposing views and considering the way that this manifests in the real world and how stakeholder and shareholder interests may not necessarily be in opposition. The bibliography cites 13 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEshareCSR.rtf
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Unformatted sample text from the term paper:
continue. When looking at the way in which corporation are held accountable a great deal of emphasis is placed in their accountability to the shareholder, the defined primary user of
the annual accounts is the shareholder (Elliott and Elliott, 2007) and the use of auditors to assess the accuracy of the accounts is undertaken for the interests of the shareholder
(ACCA, 2008). When taking this perspective it may be argued that the corporations are therefore answerable to the shareholders, and as long as they are acting in a legal manner
this is their only duty. From an ethical purpose it may be argued that the purpose of the firm is defined in the memorandum of incorporation or other relevant documents
used at the setting up of the firm, and it is on this basis that initial investors put money into the business (Davies, 2007). For a firm to then expand
its remit and seek to undertake actions that may reduce the efficiency of the primary purpose may be argued as unethical; effectually using funds for purposes that have not been
authorised by the investors (Chyssides and Kaler, 1998). This may be seen as a controversial argument, and was one that was put forward by Friedman with the argument that
the responsibility of a business is purely to its shareholders, undertaking actions as are necessary in order to maximize profits (Chyssides and Kaler, 1998). This is not mean that an
organization cannot consider other stakeholders undertake actions that are lined with the model of corporate social responsibility, but that the action should not be taken for purely altruistic reasons; the
actions may be undertaken where there is a benefit in terms of profit creation. For example, there are many firms which are deemed to be good corporate citizens that utilized
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