Stakeholder theory of the modern corporation

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Nowadays, corporation should deal with number of norms and laws because it is accepted a legal person. In case, the corporation breaches the law or does not act in benefit of the shareholders, stakeholders, employees, suppliers and society, it can be suited. Scholars believe that there are some theories that can be used for preventing businesses. Two of the most debated theories are stakeholder theory and shareholder theory.
In my opinion, both theories have a lot in common and they cannot be divided. According to Hawke both theories “used to justify differing views on: whistle- blowing, tax avoidance, risk to auditor independence, deception and exploitation in business transactions”. (Hawke, 2010) Both theories have the same practical implementations and the same consequences, which mean that if stakeholder theory is true, then shareholders theory is trues.
In the modern corporation, the manager is the person who has the right to use company’s resources in order to meet not only stockholder wished but also to cover the needs of all employees, suppliers and society. In case something goes wrong, the stockholders can sue the manager for not doing what he/she is supposed to.
The figure below explains how the stakeholder theory works in the modern corporations. It describes how the corporation is organized and who are the people that it has to serve are. To sum this up, I would say that one big corporation should be responsible for the entire society.
Owners take financial part of the corporation by having stocks and bond, and they expect financial return for that. All these owners can be differing from one another and each one of them can have different preferences such as money, morality, obligations, loyalty. Supplies ...

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... of nature and when one company is eco oriented, it is better for customers and for the company as well. According to M. Starik, many stakeholder theories of companies ignore such ecological necessities. (Freeman, 2010) However, according to the reasonable pluralism firms can develop their ecological principle in accordance with the principle of caring for the earth and making the world better.

Works Cited

Hawke, P. (2010). Stockholder Theory vs Stakeholder Theory A Genuine. Available: http://www.docstoc.com/docs/37199193/Stockholder-Theory-vs-Stakeholder-Theory-A-Genuine.

Freemen, E. (2010). Stakeholder theory of modern corporation. Available: http://academic.udayton.edu/lawrenceulrich/Stakeholder%20Theory.pdf.

Thomas, M. J. (2011). Differences Between Stakeholder and Shareholder Theory of the Firm. Available: https://www.youtube.com/watch?v=bQIKaOFB0b8.

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