Shareholder Essays (Examples)
Study Document
Shareholder Vs Stakeholder Theory
Introduction
Milton Friedman’s quote gets to the heart of the conflict between shareholder theory vs. stakeholder theory. Shareholder theory posits that a corporation’s sole responsibility is to maximize the return on investment (ROI) for shareholders. Stakeholder theory posits, on the other hand, that a company owes a duty to all stakeholders (not just shareholders)—members of the community, workers, consumers; in short, anyone who is part of or who is impacted in some way by the company. The … of or who is impacted in some way by the company. The question is: Do corporations exist only to serve the interests of shareholders or do they also have a responsibility to serve stakeholders as well? This paper will answer that question by looking at the nature … in business: Law, Culture, Philosophy, and Religion. It will show that in today’s business environment, stakeholder theory needs to be pursued instead of shareholder……
References
References
Augustine. (n.d.). Commentaries on Sermon on the Mount. http://www.newadvent.org/fathers/16011.htm
Chen, J. (2019). Market Milestones as the Bull Market Turns 10. Retrieved from https://www.investopedia.com/market-milestones-as-the-bull-market-turns-10-4588903
Egan, M. (2018). Tax cut triggers $437 billion explosion of stock buybacks. Retrieved from https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html " target="_blank" REL="NOFOLLOW">
Study Document
Volkswagen Emissions Fraud
… on fraud charges in the US as a result (Smith, 2018).
The first bias was likely the decision between duty – duty to shareholders to enhance the stock price, and duty to the public and regulators to provide emissions information that was accurate. The duty to regulators … and duty to the public and regulators to provide emissions information that was accurate. The duty to regulators was legal. The duty to shareholders is real, but not legal, but it also included a duty to himself, as he would also benefit from an increase in the … into the different ethical conflicts that can arise. One is the conflict between fairness and cheating. In this case, the fairness certainly includes shareholders, who have at least some priority in the hierarchy of stakeholders. The author advances the idea that non-shareholder constituents should have the same level of interests as shareholders, but……
References
References
Ganti, A. (2019) Rationcal choice theory. Investopedia. Retrieved January 18, 2020 from https://www.investopedia.com/terms/r/rational-choice-theory.asp
Palmiter, A. (no date). Corporate governance as moral psychology. In possession of the author.
Parloff, R. (2018) How VW paid $25 billion for dieselgate – and got off easy. Business Ethics. Retrieved January 18, 2020 from https://business-ethics.com/2018/02/08/1638-how-vw-paid-25-billion-for-dieselgate-and-got-off-easy/
Smith, A. (2018) Volkswagen ex-CEO charged with fraud in diesel emissions scandal. CNN. Retrieved January 18, 2020 from https://money.cnn.com/2018/05/03/news/companies/winterkorn-vw-diesel-scandal/index.html
Study Document
Elon Musk And Power At Tesla
… point out, “the main argument against CEO duality (or dual leadership) is based on agency theory, which predicts that CEOs, as agents of shareholders, do not always act in the best interests of shareholders” (p. 1). This can be seen especially in the case of Elon Musk at Tesla. By serving as Chairman of the Board he … from shorts who saw Tesla’s increasing debt burden and negative cash flow as long-term problems, Musk sought ways to enhance the perception among shareholders that the company was a legitimate growth company. The result was a series of PR moves designed to help pump up the price … was a series of PR moves designed to help pump up the price of the stock—which worked as Tesla’s stock price soared, making shareholders happy and rich. However, when sell side analysts began to criticize Musk’s actions and pick apart the company’s revenues……
References
References
Abels, P. B., & Martelli, J. T. (2013). CEO duality: how many hats are too many?. Corporate Governance: The international journal of business in society, 13(2), 135-147.
Dickins, D. (2010). CEO and COB duality: Does it matter. Internal Auditing, 25(4), 35-38.
Gaydos, R. (2018). Elon Musk may have violated Tesla’s conduct and ethics code after smoking up in podcast interview: report. Retrieved from https://www.foxnews.com/tech/elon-musk-may-have-violated-teslas-conduct-and-ethics-code-after-smoking-up-in-podcast-interview-report
Porter, J. (2018). Tesla has found a new chairperson to replace Elon Musk. Retrieved from https://www.theverge.com/2018/11/8/18074800/tesla-new-chair-2018-robyn-denholm-elon-musk
Yang, T., & Zhao, S. (2014). CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment. Journal of Banking & Finance, 49, 534-552.
Study Document
Impact Of Agency Theory
… its financial decision making to the agent. In most cases, the agent is the owner/executive of the company while the principle is the shareholder. Challenging scenario arises as there are two distinct sets of interest which cause decision making problems. Due to this complex and intricate relationship, … any one party to suffer at an extreme case.
To remove the problem, the theory states that the goals of managers and the shareholders should be aligned and certain frameworks and practices should be adopted to overlook the decisions like employees’ stock ownership and monitoring by the … and ways of performance, it gives room for agency theory to impact its decision. It impacts the profitability, return on investment, operating expense, shareholder value and other financial performance through influencing the key decision making that goes around these factors. Wells Fargo have a decentralized set up, … the decision involving risk has……
References
References
Demsetz, R. S. (1997). Agency Problems and Risk Taking at Banks.
Heath, J. (n.d.). Uses and Abuses of Agency Theory. Business Ethics Quarterly.
Kuypers, A. (2011). How is dealt with the agency problem and what is the role of the board of directors in it?
Lumen. (n.d.). Agency and Conflicts of Interests. Lumen. Retrieved from https://courses.lumenlearning.com/boundless-finance/chapter/agency-and-conflicts-of-interest/
Murray, I. (2016, September ). Wells Fargo and the Principle Agent Problem. Competitive Enterprise Institute.
Palia, D. (2007). “Agency Theory in Banking: An Empirical Analysis of Moral Hazard and the Agency Costs of Equity. Banks and Banks System.
Pennsylvania, W. U. (2017, August 08). Wells Fargo: What It Will Take to Clean Up the Mess. Wharton University of Pensylvannia.
Study Document
Agency Theory And The Limitations Of Representative Government
… matter: the agent-principle relationship is limited in terms of what can be achieved before self-interest becomes a factor that must be considered. Because shareholders and stakeholders can be elements in that self-interest it……
References
References
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Elwood, T. W. (2008). Politics of the US Federal Budget Process. International quarterly of community health education, 28(1), 3-12.
Jennings, M. (2008). Business Ethics: Case Studies and Selected Readings. Cengage.
Machold, S., Ahmed, P.K., & Farquhar, S.S. (2007). Corporate Governance and Ethics: A Feminist Perspective. Journal of Business Ethics (2008) 81:665-678.
ProActive Solutions. (2020). Agency theory. Retrieved from http://knowledgegrab.com/learners-zone/study-support/performance-management-review/framework-introduction-to-hrm/agency-theory/
Study Document
Political Frame In The Walt Disney Company
…
Michael Eisner’s reign as the CEO and Chairman of Disney can to an end on March 3rd, 2004, after 43% of the company’s shareholders withheld their endorsement and failed to endorse his position on the Board. He stayed as the CEO of the company for one more … result was the diversity in the company. This diversity then resulted in differences in values, beliefs, interests, and perceptions that eventually lead to shareholders not supporting his Board Chairmanship, bringing his tenure to an end.
Significance of the “Toxic Triangle” and how it informs Eisner’s case
The … gullible followers, and an environment that accommodates it all.
This illustration fits Eisner’s case study, at least to the point before which the shareholders declined, endorsing his chairmanship for the Board. First, it is noted that the position of the CEO wields incredibly high power in terms ……
References
References
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.
Bright, R., & Eisner, M. (1987). Disneyland: Inside Story. Harry N. Abrams, Incorporated, Publishers.
Downes, M., Russ, G. S., & Ryan, P. A. (2007). Michael Eisner and His Reign at Disney. Journal of the International Academy for Case Studies, 13(3), 71-81.
Forbes, W., & Watson, R. (2010, July). Destructive Corporate Leadership and Board Loyalty Bias: A case study of Michael Eisner’s long tenure at Disney Corporation. In Working Paper presented at the Behavioural Finance Working Group Conference, Cass Business School.
Sasnett, B., & Ross, T. (2007). Leadership frames and perceptions of effectiveness among health information management program directors. Perspectives in health information management/AHIMA, American Health Information Management Association, 4.
van Weezel, A. (2006). A Behavioural Approach to Leadership: The case of Michael Eisner and Disney. In Leadership in the Media Industry: Changing Contexts, Emerging Challenges (pp. 169–178). Jönköping: Media Management and Transformation Centre, Jönköping International Business School.
Study Document
Starbucks
… year, Starbucks had just under $1 billion in total assets, about one-third of which were current assets. The company had minimal leverage, with shareholders’ equity amounting to 80% of the capital structure. In 2009, the growth of the company flatlined, but continued its growth as it came ……
References
References
Cannivet, M. (2019) Starbucks’ big stock buyback limits future upside. Forbes. Retrieved October 4, 2019 from https://www.forbes.com/sites/michaelcannivet/2019/08/29/starbucks-big-stock-buyback-limits-future-upside/#26c434067047
Hawley, J. (2019) Who are Starbucks’ main competitors? Investopedia. Retrieved October 4, 2019 from https://www.investopedia.com/articles/markets/101315/who-are-starbucks-main-competitors.asp
Macrotrends (2019) Starbucks. Macrotrends.com. Retrieved October 4, 2019 from https://www.macrotrends.net/stocks/charts/SBUX/starbucks/financial-statements
Marketwatch (2019) McDonalds Marketwatch. Retrieved October 4, 2019 from https://www.marketwatch.com/investing/stock/mcd/financials
Sharf, S. (2013) Starbucks ordered to pay Kraft $2.8 billion. Forbes. Retrieved October 4, 2019 from https://www.forbes.com/sites/samanthasharf/2013/11/12/starbucks-ordered-to-pay-kraft-2-8-billion/#5516b7fa167d
Starbucks 1999 Annual Report. Retrieved October 4, 2019 from https://s22.q4cdn.com/869488222/files/doc_financials/annual/1999/102640_financials2_99.pdf
The Coffee Brewers (2008) With Starbucks closing 600 shops, is the coffee business still lucrative? The Coffee Brewers. Retrieved October 4, 2019 from https://www.thecoffeebrewers.com/starbucks.html
Study Document
Agency Theory
Introduction
Agency theory is a theory explicating the relationship between the shareholders, who act as the principals, and the managers, who act as the agents. Within this relationship, the principal either employs or delegates an … of investing in the growth of the company. Yet again, this point of view is usually in contrast with the perspective of the shareholders whose main endeavor is to get higher dividends as a return to their investment (Eisenhardt, 1989).
Lastly, there is the issue of horizontal ……
References
References
Ballwieser, W., Bamberg, G., Beckmann, M. J., Bester, H., Blickle, M., Ewert, R., ... & Gaynor, M. (2012). Agency theory, information, and incentives. Springer Science & Business Media.
Bou?ková, M. (2015). Management accounting and agency theory. Procedia Economics and Finance, 25, 5-13.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Healy, P. M. (2005). Financial Reporting Problems at Molex, Inc.(A). Harvard Business School.
Larcker, D. F., & Tayan, B. (2007). Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?. Rock Center for Corporate Governance at Stanford University Case Teaching No. CG-05.
Mitnick, B. M. (2015). Agency theory. Wiley encyclopedia of management, 1-6.
Scott, W. R., & O\\\\\\'Brien, P. C. (2003). Financial accounting theory (Vol. 3). Toronto: Prentice Hall.
Tearney, M. G., & Dodd, J. (2009). Accounting theory. H. I. Wolk (Ed.). New York: Sage.
Study Document
Walmart And Starbucks Sustainability
… them touch on this article's concepts. The core concept is that within the framework of the law, corporations have a responsibility to their shareholders to make money. The logic is this. People invest in corporations to earn returns on their investment. Corporate managers serve the shareholders, and therefore they should orient their activities solely towards increasing profit. Friedman is clear that this is within the context of the law, ……
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References
Aguilera, R, Rupp, D., Williams, C. & Ganapathi, J. (2005) Putting the S back in corporate social responsibility: A multi-level theory of social change in organizations. Academy of Management Review. (2005). Retrieved November 4, 2017 from https://www.ideals.illinois.edu/bitstream/handle/2142/1768/TS_Aguilera.pdf?sequence=2&isAllowed=y
Banerjee, S. (2008) Corporate social responsibility: the good, bad and the ugly. Critical Sociology. Vol. 34 (1)
Blowfield, M., Frynas, J. (2005) Editorial setting new agendas: Critical perspectives on corporate social responsibility in the developing world. International Affairs. Vol. 81 (3) 499-513.
Brammer, S., Jackson, G. & Matten, D. (2012). Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-Economic Review. Vol. 10 (2012) 3-28.
Campbell, J. (2007) Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility The Academy of Management Review. Vol. 32 (3) 946-967.
Epstein, E. (1987) The corporate social policy process: Beyond business ethics, corporate social responsibility, and corporate social responsiveness. California Management Review. Vol. 29 (3) 99.
Friedman, M. (1970) The social responsibility of business is to increase its profits. New York Times Magazine. Retrieved November 4, 2017 from https://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Heningway, C. & Maclagan, P. (2004) Managers' personal values as drivers of corporate social responsibility. Journal of Business Ethics. Vol. 50 (1) 33-44.
Study Document
Directors Remuneration And Its Impact On Share Repurchases
… look at one Irish company that recently engaged in share repurchasing and assessing stakeholders’ views on that program. Stakeholders will include more than shareholders, as they are but one type of stakeholder. Other stakeholders that will be invited to participate in this study will be members of … be considered moral if it contributes to the greatest common good of a community (Mill, 1859).
It is expected that stakeholders who are shareholders will welcome the…[break]…share repurchasing program in connection with directors’ remuneration. The view of the stakeholders compared to the character of the company in ……
References
References
Bendix, R. (1974). Inequality and social structure: a comparison of Marx and Weber. American Sociological Review, 149-161.
Chan, R., & Hoy, M. (1991). East—West joint ventures and buyback contracts. Journal of International Economics, 30(3-4), 331-343.
Choi, C. J., & Maldoom, D. (1992). A simple model of buybacks. Economics Letters, 40(1), 77-82.
Durkheim, E. (1997). The Division of Labor in Society. NY: The Free Press.
Egan, M. (2018). Tax cut triggers $437 billion explosion of stock buybacks. Retrieved from https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html " target="_blank" REL="NOFOLLOW">
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