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Essay / Research Paper Abstract
This 8 page paper considers the assertion that he assertion that businesses which pursue ‘managerial’ objectives will be less efficient and less profitable than firms which pursue 'owner' objectives. The bibliography cites 6 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEbuseff.rtf
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Unformatted sample text from the term paper:
are also two groups that may be seen to occupy pension switch may agree, but may also have divergent goals. The shareholders are
the ultimate owners of a company, however, they do not own a share of the company, they own an interest in it, which is then delegated to the management for
day to day running. The goals of the shareholders are likely to be different to the management. Shareholder will buy shares n a company with the intention of profit in
the majority of cases. Exceptions may be where shares are bought due loyalty, such as with football clubs, or due to the perks that may be gained, such
as a discount from the company. The profit they are looking for may be dividends or in capital growth. Both of these may be seen as demanding short term and
long tem results. The management may have different goals. These may also add shareholder value, but are likely to be more diverse. There are two main corporate governance models that
have been developed that can be used to look at these two divergent approaches, and may describe the way the company may work towards shareholder goals, or management goals. It
is only by looking at these that either may be assessed to see which is the most effective. Corporate governance has generally divided into two schools, that of shareholder wealth
maximisation (SWM) and that of corporate wealth maximisation (CWM). These are not particularly new schools of though and many of the arguments are not new. There are strong arguments in
favour of both paradigms which are not always exclusive to their own school of thought, but encompassed within a broader commercial aspect. In order to understand the way these two
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