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International Finance

1. It is not uncommon for people to have an intuitive agreement with the notion of balancing the interests of shareholders and stakeholders as the correct goal of the firm, rather than maximizing shareholder wealth (which in its purest form does not even recognize the claims of stakeholders).

Why then do you think the academic world fixates on maximizing shareholder wealth as the goal of the firm? It is understandable why Wall Street would push this goal since they represent stockholders. But why do you think the academic world also fixates on this goal rather than the notion of finding a balance between the interests of shareholders and stakeholders?

2. I would agree that different stakeholder groups do compete with each other for the sales dollar. The interesting concept to think about is how one of your firm's competitors (another company) also is a stakeholder in your company. In other words, how might a competing firm have an interest in your company's success? How would they be hurt if your company is not successful and goes out of business?

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1. It is not uncommon for people to have an intuitive agreement with the notion of balancing the interests of shareholders and stakeholders as the correct goal of the firm, rather than maximizing shareholder wealth (which in its purest form does not even recognize the claims of stakeholders).

Why then do you think the academic world fixates on maximizing shareholder wealth as the goal of the firm? It is understandable why Wall Street would push this goal since they represent stockholders. But why do you think the academic world also fixates on this goal rather than the notion of finding a balance between the interests of shareholders and stakeholders?

I believe that the academic world fixates on balancing shareholder and stakeholder interests for a number of reasons. The first is because they both bring profit to an organization. Since ...

Solution Summary

This solution discussed finance and stakeholders for finance.

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