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20 Nov

Stakeholder vs Shareholder theories


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Stakeholder vs Shareholder theories have been an on-going debate. Many scandals in recent history such as Enron, WorldCom, Wells Fargo, and others, are often used as evidence that the shareholder theory encourages or at least opens the door for unethical decision-making. Stakeholder and shareholder theories are normative theories of social responsibility. Some business leaders argue there is very little if any difference to the two theories as both support social responsibility. Does shareholder theory encourage unethical business decisions? In what ways do the theories support social responsibility? How would one determine the stakeholder priority when making an ethical decision when competing needs of the stakeholders are apparent?
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