Question

Talks about the need to balance satisfying shareholders with servicing all corporate constituents (employees, customers, suppliers, etc.). Is he right?

Option 1: Yes, achieving a balance is crucial for overall corporate success.

Option 2: No, prioritizing shareholders is the sole key to corporate success.

Answer 1

Achieving a balance between satisfying shareholders and servicing other corporate constituents is crucial for overall corporate success.

Step-by-step explanation:

Yes, achieving a balance is crucial for overall corporate success. Prioritizing only shareholders can lead to negative consequences for a company. By striving for a balance between satisfying shareholders and servicing other corporate constituents such as employees, customers, and suppliers, a company can build trust, loyalty, and long-term success.

For example, if a company focuses solely on maximizing shareholder value, it may neglect the well-being of its employees. This can lead to low employee morale, high turnover rates, and a negative reputation in the labor market. Similarly, prioritizing shareholders at the expense of customers' needs and satisfaction can result in decreased sales and customer loyalty.