the stakeholder theory of the firm

the stakeholder theory of the firm - Dan Barrecchia Chapter...

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Dan Barrecchia Chapter 1: Stakeholder Theory of the Firm There are two different kinds of corporate theories discussed in this section. The first is Ownership Theory See’s the firm as property of the owner and having a soul purpose to make as much money as possible for shareholders. The managers and board of directors hold obligations to no one but the stock holders. This can be seen as a very self-centered approach to running a corporation. *Side note, a stakeholder refers to people or groups that affect, or are affected by an organizations decisions, policies, and operations. The second is Stakeholder Theory of the Firm In contrast to the ownership theory, the stakeholder theory takes into account a broader public interest. Holds interest in creating value for society rather than just profit. Obviously one of its biggest goals is to create profit so that it continues to run and pay salaries, however, these types of corporations take into account moral obligations as well.
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