Asked by: Mariette Ustara
asked in category: General Last Updated: 12th March, 2020

What is the difference between shareholder and stakeholder theory?

Shareholders are always stakeholders in a corporation, but stakeholders are not always shareholders. A shareholder owns part of a public company through shares of stock, while a stakeholder has an interest in the performance of a company for reasons other than stock performance or appreciation.

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Subsequently, one may also ask, what is the difference between stakeholder theory and shareholder theory?

Shareholder theory claims corporation managers have a duty to maximize shareholder returns. Stakeholder theory, on the other hand, notes that it's the business managers ethical duty to both corporate shareholders and the community at large that the activities that benefit the company don't harm the community.

Furthermore, what is the shareholder theory? Shareholder theory is the view that the only duty of a corporation is to maximize the profits accruing to its shareholders. Under shareholder theory, the only reason management is working on behalf of shareholders is to deliver maximum returns to them, either in the form of dividends or an increased share price.

Also Know, what is the difference between a shareholder and a stockholder?

The difference between a stockholder and a shareholder. Both the terms stockholder and shareholder refer to the owner of shares in a company, which means that they are part-owners of a business. Conversely, "shareholder" means the holder of a share, which can only mean an equity share in a business.

What is the purpose of the firm shareholder and stakeholder theories?

The first, shareholder theory, emanates from an economic perspective, focusing on the firm's purpose of creating wealth for its owners while minimizing both the importance of the firm's interaction with its other constituencies and its role in society.

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