Pros and cons of ranking shareholders over employees and other stakeholder

Bussinesss and socity Essay

GE contributed to environmental degradation in areas where the company manufactured its products. Could It have done better?

A value chain is explained as the sequence of coordinated actions that add value to a product or service.

Advantages and Disadvantages of Stakeholders

One obvious way in which this can be done is for the board of directors to dismiss senior executives who do not maximize profitability. Few would dispute that such behavior should be discouraged rather than rewarded.

In earlythe U. However, analysts felt that the Welch Era was not without flaws. Obviously, the company did well despite the controversial nature of some of their business dealings. Like the seasons in the year, there were rhythms and rituals to how Jack Welch managed GE.

Stakeholders can be internal, with a "vested" or financial interest in the company such as a shareholder, partner or investor.

Corporate Governance, and the Stakeholder vs. Shareholder Model

Everyone hinders through life and sets goals. Bythe number of employees went up tomostly as a result of acquisitions. Proportionality Ethic — Welch made decisions that were for the good of the company for profit and for himself higher pension plan and benefits for himself.

Codes of conduct are formal statements of aspirations, principles, guidelines, and rules for corporate behavior. What are the pros and cons of ranking shareholders over employees and other stakeholders?

Stakeholders often come from a variety of backgrounds and levels of experience, which help them see a bigger picture that a business owner might not see. The company did not always follow the laws, and they were fined and charged accordingly.

Therefore, mergers and acquisitions are easy to do because management can act quickly. What specific role, if any, did the government play in each case study?

Management standard is a model of the methods an organization can use to achieve certain goals. General Electric contributed in philanthropic and community activities while creating foundations for nonprofit organizations and college grants.

Note that the study did not ask the managers about their own views on the question. Use facts from the case study to support your argument. To be sure, most U.

However, research indicates that the forced departure of executives who do not maximize profits is by no means assured, showing it to be more likely when there is an outsider-dominated rather than an insider-dominated board.

The needs of the stakeholder of the business were considered by Welch, and GE shareholders were rewarded at the expense of employees. However, it is startling to note that there is evidence that public perceptions may not comport with those of economists and the financial community.

Formal statements of aspirations, principles, guidelines, and rules for corporate behavior. Welch should have organized cleanup exercises in line with Superfund law.

Morgan from to You may never go wrong with strong leadership ethics and a well rounded team. In this context, we can see that the dispute between the shareholder and stakeholder theories in the United States, in which it appeared for several years that the shareholder theory was emerging as a victor, is now best viewed as a standoff.

At the same time, however, the company engaged in activities that went against societal good.In an organization, ranking and evaluation system can have serious repercussions on how the different stakeholders relate with each other. Ranking shareholders over other stakeholders empowers the former to have more control of the organization.

The pros of this move are that it puts more pressure on the board of directors to meet high profit goals. Nevertheless, he lacked the responsibility to his employees and environmental society. 4. What are the pros and cons of ranking shareholders over employees and other stakeholders?

Is it wrong to see employees as costs of production? By ranking the shareholder ahead of the other stakeholder they are maximizing profits and shares. The pros were that ranking shareholders would mean more money and the cons would evidently mean that because shareholders were put first, the employees would be discouraged and would not want to work for that particular company.

Pros And Cons Of Ranking Shareholders Over Employees And Other Stakeholder  Shareholder and Stakeholder Over the last decade, with the rapid development of business management, the Shareholders who are the effective owners of the company invest money into the business and want as much profit as possible as a return for their investment.

manner (Diara, Alilo, and McGuire ). There is a growing expectation that companies will adopt a business approach that illustrates responsibility to society above and beyond the economic function and legal performance of the firm (Gibbs ).

Answer to What are the pros and cons of ranking shareholders over employees and other stakeholders? Is it wrong to see employees as costs of production?

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Pros and cons of ranking shareholders over employees and other stakeholder
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