Question

A manager that primarily focuses on the shareholders of the corporation rather than all of the vested parties in the businesses operations and activities is practicing which theory of normative business ethics?a) Stakeholder theoryb) Investor theoryc) Stockholder theoryd) Shareholder theorye) Social contract theory

Answer 1

Answer:

d) Shareholder theory

Explanation:

A manager that primarily focuses on the shareholders of the corporation rather than all of the vested parties in the businesses operations and activities is practicing the Shareholder Theory of normative business ethics.

Answer 2

Answer: Shareholder theory

Explanation: As per the shareholder theory, the manager focuses all his or her efforts on the profit maximization of the shareholders of the company. A manager following shareholder theory will not be much concerned about the other stakeholders of the organisation. The benefit to shareholders could be provided either by increase in share price or as heavy distribution of dividends.

Hence, the correct option is D.