Stockholder management versus stakeholder management Essay

Stockholder management versus stakeholder management - Essay ExampleHere, stockholders shell out the capital that the managers could hire in order to realize specific goals. Friedman supports his arguments by certain important points. First, is that this classical view of stockholder management is in consonance with the free-enterprise system where a corporate executive is an employee of the stockholders and has responsibleness to breeding the business in accordance with their desires, which generally will be to make as much coin as possible while conforming to the basic rules of the society. (Friedman, p. 52) He stressed that a businessman who supports neighborly responsibility in business is a mere rhetoric since it equates to an unadulterated form of socialism and against the creation of free-enterprise. Another salient point that Friedman elaborated on is that the managers of a corporation atomic number 18 just agents of the owners. They are empowered to manage the money a dvanced by the stockholders, but are bound by their delegacy relationship to do so exclusively for the purposes delineated by their stockholder principals. (p. 66)Friedmans essay is a treatise that discussed why it would be wrong for a particular managerial team to undertake social responsibility activities for the ships company since it is against the interest of the stockholders. The author underscored the fact that the company pays its dues to the society by paying taxes and whatever societal ills and deficiencies there are it is the responsibility of a government.In A Stakeholder Theory of the Modern Corporation, Edward Freeman (1999) criticizes Friedman and his grooms arguments that a corporation must only take into consideration the profit of the stockholders because they own the company. His roughly important point is that the stockholder is not the only party who has a stake in the company and, hence, placing these other parties interest subordinate to