Preview

What Is The Main Objectives Of The Firm

Satisfactory Essays
Open Document
Open Document
208 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
What Is The Main Objectives Of The Firm
What is the main objectives of the firm? http://www.answers.com/Q/What_is_the_main_objectives_of_the_firm There are two primary schools of though as to what the objective of a form should be. Traditionally it has be to maximise the wealth of shareholders but in recent times the view that the primary objective of a firm should be to maximise stakeholder value has begun to gain traction.

Shareholder Wealth Maximisation
Shareholder's gain wealth through capital gains (increases in share price) and through the receipt of dividends. Due to the vague and complicated nature of this objective other objectives are commonly suggested as possible substitutes. examples of such substitute objectives are:
•Profit maximisation
•Sales maximisation
•Survival
•Improved efficiency
•Social Responsibility

Stakeholder Value Maximisation
A stakeholder is anyone that has an stake in a company, e.g. shareholders, employees, suppliers, etc. The stakeholder value maximisation view argues that in order for a firm to function it must be able to satisfy all of its key stakeholders, not just its shareholders.

Legal position http://www.brookings.edu/~/media/research/files/papers/2012/6/18%20corporate%20stout/stout_corporate%20issues.pdf http://www.enterpriseethics.org/Portals/0/PDFs/good_business_chapter_07.pdf
http://bizfinance.about.com/od/Basic-Financial-Management/a/what-is-shareholder-wealth-maximization.htm
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    What Are The Different Stakeholders Who Influence The Purpose Of Two Contrasting Businesses
    • 615 Words
    • 3 Pages

    What Are The Different Stakeholders Who Influence The Purpose Of Two Contrasting Businesses

    A stakeholder is someone who is affected by the business either in success or failure. The stakeholders of Blackpool pleasure beach are:…

    • 615 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Different Stakeholders Who Influence the Purpose of Two Contrasting Organisations
    • 1865 Words
    • 8 Pages

    Different Stakeholders Who Influence the Purpose of Two Contrasting Organisations

    Stakeholder is a person or groups who have interest in the success of the organization. A stakeholder is mainly concerned with an organization delivering better results and meeting its financial objectives. There are two types of stakeholder.…

    • 1865 Words
    • 8 Pages
    Good Essays
    Read More
  • Good Essays

    Eco 372 Week 4 Paper
    • 1367 Words
    • 6 Pages

    Eco 372 Week 4 Paper

    The Shareholders(Correct) The stakeholder theory acknowledges the importance of shareholders and that maximizing shareholder value is one of the company's primary purposes. However, it is important to remember that shareholders should not be considered the only stakeholders of any consequence.…

    • 1367 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    M3.45 Managing and Developing Relationships in the Workplace & M3.47 Delivering Services in the Workplace
    • 4732 Words
    • 19 Pages

    M3.45 Managing and Developing Relationships in the Workplace & M3.47 Delivering Services in the Workplace

    A stakeholder is any person or organisation who can be positively or negatively impacted by, or cause an impact on the actions of a company or organisation. In our case this could be, for example, the Police, who share office accommodation with our Community Safety Team.…

    • 4732 Words
    • 19 Pages
    Powerful Essays
    Read More
  • Good Essays

    Business Btec Level 3
    • 4770 Words
    • 20 Pages

    Business Btec Level 3

    A stake holder in a business is somebody that can affect or be affected by the actions of the business. Businesses have several stake holders each. Anybody associated with a business can be a stakeholder of that business in some way.…

    • 4770 Words
    • 20 Pages
    Good Essays
    Read More
  • Good Essays

    P2/M1 Unit 37
    • 1285 Words
    • 6 Pages

    P2/M1 Unit 37

    Stakeholder is anyone with an interest in a business. Stakeholder can be individuals, groups or even organisations that are affected by the activity of the business, they include:…

    • 1285 Words
    • 6 Pages
    Good Essays
    Read More
  • Good Essays

    bus 682 sfsu
    • 438 Words
    • 2 Pages

    bus 682 sfsu

    The terms stakeholder refers to persons and groups that affect, or are affected by, an organization’s decisions, policies and operations. This is the definition of stakeholder; however, I think the most important part is not the definition of stakeholder, and the real important is that what the power of stakeholder is.…

    • 438 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    study guide 1 -5 chapters
    • 2192 Words
    • 9 Pages

    study guide 1 -5 chapters

    Stakeholder: An individual or organization whose interests may be affected as the result of what another individual or organization does.…

    • 2192 Words
    • 9 Pages
    Good Essays
    Read More
  • Good Essays

    Unit 37 P2
    • 1929 Words
    • 8 Pages

    Unit 37 P2

    Stakeholder is a person or a group who are inquisitive and focused on business. It could be anyone such as an individual, bank, customer, and employee. They also include owners who are focused on how much money the business makes.…

    • 1929 Words
    • 8 Pages
    Good Essays
    Read More
  • Powerful Essays

    BLE 215 Midterm
    • 2051 Words
    • 5 Pages

    BLE 215 Midterm

    The difference between shareholder and stakeholder is that shareholders are individuals who own stock in a company in hopes of making a profit. On the other hand, stakeholders are individuals who have an interest in a company, or any organization and are affected by what happens within the institution based on rules. In this article, Joseph Johnston argues, “Stakeholder theory sounds good in social theory but will not work in practice.” In other words, the theory is saying that the “shareholder” is more crucial and important than the “stakeholder”, and I agree with the theory that Joseph Johnston has said. Shareholder in other words means the CEO of the company, and stakeholder are the one whoever is involved with the company. However, the shareholder doesn’t have to be participating inside of the company, it can be people from different industry or corporations. In the nowadays society, the shareholder plays a more important role than the stakeholder. They have to get along with the society, and what I mean by that is they have to have contact with financing, operations, government, control aspects, and consideration. This is what it has to include in order taking the company to success. Therefore, the main point that Joseph Johnston is trying to say is in the realities nowadays, you can’t just focus on one people anymore, you have to play as a team, you have to notice the society.…

    • 2051 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Better Essays

    Stakeholders In Pharmacare: Law, Ethics, And Corporate
    • 1463 Words
    • 6 Pages

    Stakeholders In Pharmacare: Law, Ethics, And Corporate

    A stakeholder is a person, group or organization that has interest or concern in an organization (businessdictionary). Generally the common characteristics stakeholders might have are if they stand to gain or lose through the success or failure of the company. “A corporate stakeholder can affect the actions of a business as a whole” (businessdictionary). PharmaCARE is a well-reputed company whose number one goal is to produce quality care products across the world. PhramaCARE’s prime stakeholders include CompCARE, employees and the employers. Any decision PharmaCARE makes can either be a negative or positive…

    • 1463 Words
    • 6 Pages
    Better Essays
    Read More
  • Best Essays

    Business Strategy and Whitbread
    • 2252 Words
    • 10 Pages

    Business Strategy and Whitbread

    Bibliography: “A mission statements aim is to provide stakeholders with clarity about the overall purpose and raison d’etre of the organisation.” (Johnson, Scholes, Whittington 2008).…

    • 2252 Words
    • 10 Pages
    Best Essays
    Read More
  • Powerful Essays

    Mattel Toy Recalls
    • 840 Words
    • 4 Pages

    Mattel Toy Recalls

    The stakeholder approach believes that managers should take into account the views of all the organisations stakeholders and not just the shareholders when making decisions. The hope is that by doing…

    • 840 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Distinguish Between Shareholder and Stakeholder in a Business Context. Comment on the Influence of Shareholders on the Management of a Company and Its Allocation of Rewards.
    • 2201 Words
    • 9 Pages

    Distinguish Between Shareholder and Stakeholder in a Business Context. Comment on the Influence of Shareholders on the Management of a Company and Its Allocation of Rewards.

    According to Freeman stakeholder (1984) can be defined as any individual or group which is affected by or can affect achievement of the organization’s objectives (Freedman and Miles 2006). In this context organization is seen as a grouping of stakeholders and its purpose should be to manage their interests, needs and viewpoints. The fundamental role of stakeholder management is lying on top- level managers. Freeman in whose seminal work (1984) emerged new conception of stakeholder theory has elaborated two principles of this model as follows:…

    • 2201 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Good Essays

    Domino's Pizza Case Study
    • 920 Words
    • 4 Pages

    Domino's Pizza Case Study

    Stakeholder is an individuals or groups that likely to affect or be affected by a proposed action in the project management or business administration. It’s a key of the part of stakeholder management. The major stakeholder that will affect the organization’s action, objective of Domino’s Pizza is employee, customer and financial institutions.…

    • 920 Words
    • 4 Pages
    Good Essays
    Read More

Related Topics