MGMT1021 Lecture Notes - Lecture 24: Corporate Social Responsibility
4 May 2016
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Document Summary
Session 24: organization and society: two perspectives on corporate governance, shareholder-exclusive view a. i. Because shareholders are residual claimants of a firm, maximizing shareholder value automatically maximizes payoffs to other stakeholders a. i. 3. Informationally efficient stock market provides an accurate estimate of current and future shareholder payoff a. ii. The primary responsibility of corporate executives its to the owners (shareholders) whose primary interest is maximizing profits a. ii. 3. Other responsibilities pursued by executives that do not aim to increase profits are a form of taxation without representation or veiled socialism a. ii. 4. Corporations specifically designed to pursue solutions to social problems may pursue such goals a. ii. 4. a. But to require for-profit corporations to use their returns to pursue solutions to social problems would require extending the political mechanism into the corporate sector: stakeholder inclusive view b. i. Business can be understood as a set of relationships among diverse stakeholders which jointly create and trade value.
