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Question 1

Wat is de shareholder theory

Answer 1

managers must (aka, have an ethical duty to) best serve the interests of the
company owners (or shareholders)

Question 2

Wanneer is een innovation permisseble for the shareholder theory

Answer 2

An innovation/idea is permissible insofar as it serves, and best insofar as it optimises shareholder value.

Question 3

Wat is een fiduciary relationship

Answer 3

A person or organization that has
the legal or ethical responsibility to act in the best interests of another party
Moral trust: owner places special trust that agent (manager) acts in interest of principal (owner)
So the manager who is appointed by the shareholders must act in the best interest for the stakeholders

Question 4

Waarom zijn de interesses van de shareholders belangrijk

Answer 4

Because of the fiduciary relationship

Question 5

Wat is de promise based argument voor de shareholder value

Answer 5

Owners give managers capital with the purpose to make profit
Managers make a promise to serve the shareholder value
So they must fulfill that duty that they promised
But it cant be any value so sharholder value is insufficient for business ethics

Question 6

How could interest of owner may not align with interest of manager

Answer 6

Manager might focus on short-term profit to boost their year-end bonus, even if it harms the company’s long-term value or reputation

Question 7

Welke twee interpretations van shareholder value zijn er

Answer 7

Profit: Managers must conduct business in
accordance with the desire of the
owner (:=shareholder value), which
generally will be to make as much
money (:= maximise profit), while
conforming to the basic rules of
society
Social values: Owners may have „different
objectives: not „money as a motive,
but the rendering of social services
ethical goals

Question 7

Wat is de consequence argument voor de shareholder value en wat is de kritiek hierop

Answer 7

In functioning markets, profit-seeking
advances the social good
So, by seeking profit managers advance
social good
Helping society by giving jobs and paying taxes to eventually help society

Critique: Markets are broken
– Not full competition
– Not functioning prices (Full information,
externalities) by monopolies
And things as pollution are not part of the price
* So, seeking profit does not automatically
advance social good
* functioning markets require ‚ethical players‘
(sportmanship analogy), and regulation

Question 8

Wat is de stakeholder theory

Answer 8

Managers must (have an
ethical duty to) best serve the interests of
the company‘s stakeholders

Question 9

Wanneer is een innovatie permisseble

Answer 9

An innovation is permissible insofar as it
satisfies legitimate stakeholder interests

Question 10

Welke verschillende stakeholders zijn er

Answer 10

Narrow:
vital to success of firm
Employees, suppliers, (local community)
loud‘, organised‘ groups
Broad:
any group who can affect or is affected by the achievement of the organisation‘s objectives
all of society

Question 11

Waarom zijn stakeholders speciaal

Answer 11

Instrumental
– They have an impact on the company‘s profits (strategic stakeholder theory)
– A version of shareholder theory

Normative:
– Stakeholders are entitled to respect because they are affected by their decisions
– Stakeholders grant the business a ‚contract‘ to operate because without stakeholders the business couldn’t exist
All parties affected by a contract are allowed to decide So everyone affected by the organisations decions should have something to say in the decision making proces
* But the contract is hypothetical