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Shareholding versus Stakeholding
Finance & Accounting
Pages 4 (1004 words)
Shareholding versus Stakeholding Tables of Contents Introduction 3 The challenges faced by managers to be ‘socially responsible’ 3 Self-serving manager exploiting social responsibility for his/her personal gain 4 Budgeting and strategic management accounting tools as an encouragement for shareholder or stakeholder centric focus 4 Mechanism binding manager’s interest to that of shareholders or stakeholders 5 Does a positive NPV equate to a project that adds value to the typical stakeholder?…
After suitable measures to overcome the conflict have been taken, the business climate of the enterprise will be readily acceptable by the public investing in the shares of the company. This may indirectly raise the prices of the shares, leading to the generating of profit of the shareholders. Another reason for the rise of the difference between the stakeholders and the shareholders is the lack of protection rendered to the third party. Thus it is very important for the managers to pay heed to the rising differences between the stakeholders and shareholders of the company. But the main issue that the company faces is whether to use single value objective function or balanced scorecard (Siems, 2007, p.180). The challenges faced by managers to be ‘socially responsible’ In the process of being socially responsible, managers face a few challenges, for example the process of value seeking rather than value maximizing. Therefore, through the achievement of the value seeking function, the confusion that leads to maximizing the value is difficult to overcome, as the way the world is structured is quite complicated. ...
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