Question

In business ethics, the stakeholder theory of business ethics maintains that managers have an ethical responsibility to manage a firm for the benefit of all its stockholders, and for people who have a claim on a company.

• A. True
• B. False
• C. Partially true
• D. Partially false

Answer 1

The correct option is B False

The different stakeholders also have a self interest. The interest of these different stakeholders are at times conflicting. The managers and the corporation are responsible to mediate between these different stakeholders interest. The stake holders have solidarity with each other. This theory assumes that stakeholders are capable and willing to negotiate and bargain with one another. This results in long term self interest.

The role of shareholders is reduced in the corporation. But they should also work to make their interest compatible with the other stake holders. This, requires integrity and managers play an important role here. They are faithful agents but of all stakeholders, not just stockholders.