The argument against a shareholder model and in favor of a stakeholder model rests in part on the notion that:
A) Corporations are legally sanctioned by the government and thus the rights of shareholders are not unlimited.
B) According to utilitarian ethics, managers have a moral obligation to consider all perspectives.
C) According to libertarian ethics, managers must preserve the freedom of all stakeholders in their decision-making.
D) A focus on short-term profits will, in the long run, maximize utility in society .

Question

Quizplus · Accepted Answer

The argument against a shareholder model and in favor of a stakeholder model rests on the idea that a corporation, being a legally sanctioned entity, does not have unlimited rights for shareholders. This implies that corporations cannot be solely focused on maximizing shareholder value and must consider the interests of all stakeholders. The idea that a corporation is a legal entity created by the government supports the stakeholder model as it implies that the corporation exists to serve a larger social purpose beyond just shareholder value.

The Argument Against a Shareholder Model and in Favor of a Stakeholder