Distinguish Between Shareholder and Stakeholder in a Business Context. Comment on the Influence of Shareholders on the Management of a Company and Its Allocation of Rewards.
This paper specifically tries to distinguish between shareholder and stakeholder in business context. Firstly, there will be analysed main ideas of stakeholder theory, main principles of it. Secondly, the importance and characteristics of stakeholder interdependence will be shown. Thirdly, clear identification of main stakeholder groups and relationship between those groups will be outlined. In order, to distinguish shareholders from other stakeholders there will be paragraph analysing identity of this group. This analysis is followed by exceptionally important rights of shareholders which are giving them power to influence both company’s direction and through this other stakeholders.
Stakeholder theory and concept
According …show more content…
Donaldson & Preston (1995) point out that although this is descriptively true, companies appear to manage stakeholders for both instrumental (i.e., performance based) reasons and, at the core, normative reasons. Building on the work of others, Clarkson (1995) defines primary stakeholders as those “without whose continuing participation, the corporation cannot survive as a going concern,” suggesting that these relationships are characterized by mutual interdependence. He includes here shareholders or owners, employees, customers, and suppliers, as well as government and communities. This view of corporations as fundamentally relational, that is, as a “system of primary stakeholder groups, a complex set of relationships between and among interest groups with different rights, objectives, expectations and responsibilities” (Clarkson, 1995: 107).
As Clarkson (1995) argues, making corporate social responsibility a business objective is best undertaking by changing intangible social and environmental issues into tangible stakeholder interests. Thus stockholder approach fits perfectly within the view of the company that strives to deliver sustainable value to its various stakeholders.
A shareholder is any person who owns stock issued by a corporation- so