Management and Organizational Studies 1023A/B Lecture 6: MOS lecture notes 6

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

The science or study of the management of funds. The goal of the firm (for profit) creating value for the shareholders. The goal of the first is to create value of the firm"s shareholders. Maximizing the price of the exiting common stock. Good financial decision will help increase stock price and poor financial decisions will lead to a decline in stock price. Management serves as an arbitrator and moderator between conflicting interest groups or stakeholders and objectives. Creditors, managers, employees and customers hold contractual claims against the company. Stake holders any constituent groups that has interest in that company. Contractual claim: a contractual right is a claim, on other persons, that is acknowledged and perhaps reciprocated among the principals associated with that claim. Residual claims: the residual claimant refers to the economic agent who has the sole remaining claim on an organization"s net cash flows, i. e. after the deduction of precedent agents" claims, and therefore also bears the residual risk.