Question

How does the Shareholder/ Stakeholder theory apply to your life circumstances? Awarding 100 points due ASAP

Answer 1

$:\purple\implies$ Stakeholder Theory is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.

Answer 2

Explanation:

Definition: What Is Stakeholder Theory?

Edward Freeman’s stakeholder theory holds that a company’s stakeholders include just about anyone affected by the company and its workings. That view is in opposition to the long-held shareholder theory proposed by economist Milton Friedman that in capitalism, the only stakeholders a company should care about are its shareholders - and thus, its bottom line. Friedman’s view is that companies are compelled to make a profit, to satisfy their shareholders, and to continue positive growth.

By contrast, Dr. Freeman suggests that a company’s stakeholders are "those groups without whose support the organization would cease to exist." These groups would include customers, employees, suppliers, political action groups, environmental groups, local communities, the media, financial institutions, governmental groups, and more. This view paints the corporate environment as an ecosystem of related groups, all of whom need to be considered and satisfied to keep the company healthy and successful in the longterm.