StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Shareholding versus Stakeholding - Assignment Example

Cite this document
Summary
Shareholding versus Stakeholding Tables of Contents Introduction 3 The challenges faced by managers to be ‘socially responsible’ 3 Self-serving manager exploiting social responsibility for his/her personal gain 4 Budgeting and strategic management accounting tools as an encouragement for shareholder or stakeholder centric focus 4 Mechanism binding manager’s interest to that of shareholders or stakeholders 5 Does a positive NPV equate to a project that adds value to the typical stakeholder?…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Shareholding versus Stakeholding
Read Text Preview

Extract of sample "Shareholding versus Stakeholding"

Download file to see previous pages

After suitable measures to overcome the conflict have been taken, the business climate of the enterprise will be readily acceptable by the public investing in the shares of the company. This may indirectly raise the prices of the shares, leading to the generating of profit of the shareholders. Another reason for the rise of the difference between the stakeholders and the shareholders is the lack of protection rendered to the third party. Thus it is very important for the managers to pay heed to the rising differences between the stakeholders and shareholders of the company.

But the main issue that the company faces is whether to use single value objective function or balanced scorecard (Siems, 2007, p.180). The challenges faced by managers to be ‘socially responsible’ In the process of being socially responsible, managers face a few challenges, for example the process of value seeking rather than value maximizing. Therefore, through the achievement of the value seeking function, the confusion that leads to maximizing the value is difficult to overcome, as the way the world is structured is quite complicated.

Under no situation can the maximization of the value of the managers be guaranteed, but the assurance can be given that the movement of the managers is in the right direction. The absence of the negative externalities in the input factor market does not lead to the rise in the opportunity cost of the firm. If the firm is still earning the social cost of the company, this may result in the dilemma caused to the managers during the performance of the social responsibilities. Self-serving manager exploiting social responsibility for his/her personal gain Sometimes the managers of the companies with a purpose of performing the social responsibilities tend to serve their personal gains.

The reason behind this is the use of the stakeholder’s theory, through which the personal short run-interests of the shareholders are accomplished. Since a better criterion cannot be provided, the proper evaluation of the managers is not possible. Thus, by the application of the shareholders theory, the managers pursue their own interest at the expense of the firm’s financial claimants and the society at large. The directors and the managers use the resources of the firm for their own needs, such as art, medical research, etc.

without being held liable for the expenditures caused to the company. As with the practice of the stakeholder theory the internal control system of the company is being hampered, hence arguments are being placed for the government intervention – anti-takeover provisions, for example – in these areas (Letza S., et al., 2004, p.247). Budgeting and strategic management accounting tools as an encouragement for shareholder or stakeholder centric focus Such accounting tools as budgeting and the strategic management, Balanced Scorecard, and the others had been a helpful encouragement in the focusing on the shareholders and the stakeholders of the concerned country.

These tools help decide to what standard the company should stick to avoid neglecting the interests of both the shareholders and the stakeholders of the company. With tools like budgeting and strat

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Shareholding versus Stakeholding Assignment Example | Topics and Well Written Essays - 1000 words”, n.d.)
Shareholding versus Stakeholding Assignment Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/finance-accounting/1453550-week
(Shareholding Versus Stakeholding Assignment Example | Topics and Well Written Essays - 1000 Words)
Shareholding Versus Stakeholding Assignment Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/finance-accounting/1453550-week.
“Shareholding Versus Stakeholding Assignment Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/finance-accounting/1453550-week.
  • Cited: 0 times

CHECK THESE SAMPLES OF Shareholding versus Stakeholding

The Theoretical Basis for the Accounting Standard

Part 1 1a The theoretical basis for the accounting standard that requires certain long-term leases to be capitalized by the lessee is based on the notion that a lease that transfers to the lessee the risks and benefits of using an asset should be recorded as an acquisition of a long-term asset (Schroeder, Clark & Cathey, 2005)....
5 Pages (1250 words) Essay

Economic Development of China

The thesis explores two aspects of the governance roles of different types of state-share holders.... One is the relationship between firm performance and ownership percentage.... The other is the effect of different types of state-share holders on the sensitivity.... … The findings of this study suggest that firm performance and the effectiveness of monitoring mechanism do not depend on who owns shares but depends on the incentive structure of different state-share holders....
47 Pages (11750 words) Dissertation

Financial Accounting and Management Accounting

By the end of an interlude (which is in most of the cases usually a year), the subsequent financial statements are primed in order to illustrate… Financial accounts are specifically designed for the purpose of accounting information.... In order to be able to retort their requirements, the financial accountants then tend to portray the profit along with the loss account, the Each corporation that is registered under the Companies Act faces a requisite to prepare a set of accounts that would present an accurate as well as reasonable view of its profit otherwise loss for the specific year along with that of its conditions almost by the end of each year ....
12 Pages (3000 words) Essay

Shell's Business Particulars and Its Motivation

It was considered as one of the world's largest corporation by the Fortune in 2009. There were two separate holding companies Royal Dutch taking… Prior to the merger, Royal Dutch and Shell Transport were public companies originating in Netherlands and in the UK respectively.... (Omoweh, 2005) The complete merger of the two entities took place in 1907 thus the starting of The The company was then run through different operating companies....
4 Pages (1000 words) Essay

Reasons for American Civil War

This meant development of different social cultures and political ideologies and ultimately disagreements on over issues of taxation, trade tariffs and the question of state versus federal rights.... The war was brought about as a result of disagreements between the Northern and Southern states, constitutional compromises at the very onset of Federal government formation,… In this paper I will be disusing the various constitutional compromises leading to the American civil war and then move on to discuss the immediate causes of the actual war. States in the south and those in the Reasons for the American Civil War....
2 Pages (500 words) Essay

Legal Implications of Construction Decisions: Converting a Country House into a Hotel

A corporate structure is merited for providing a diverse team for managing an organization that has diverse individual interests and specializations, which is necessary for maintaining high levels of competitiveness for the company.... The organization is presented with diverse… Corporate structure will provide a decentralized decision making system and processes, and hence improve organizational decision making, whereby There are many requirements for the formation of a company in London, as guided by rules and regulations....
10 Pages (2500 words) Assignment

The Governance Roles of Different Types of State-Share Holders

"The Governance Roles of Different Types of State-Share Holders" paper suggests that different governance roles of different types of state-share holders be another important consideration for the Chinese government's future sell-off decision: state-owned shares held by GAS should be released first....
47 Pages (11750 words) Thesis

Multinational Acquisition: HP & Compaq

The author of the paper examines general criteria for the accounting of business combination under us GAAP, analysis of HP-Compaq merger accounting treatment.... The author of the paper also gives a detailed information about the acquisition of HP and Compaq… The merger of Hewlett-Packard and Compaq faced a lot of controversy from Hewlett-Packard's board of director....
7 Pages (1750 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us