Comparing shareholder and stakeholder approach

Abstract

The thesis compared the stakeholder and the shareholder approaches. While the shareholder approach focused on satisfying the owners of a business, the stakeholder approach attempted to satisfy the stakeholder of a business. This results in different views about the nature of the firm which was presented in the study. The thesis is a conceptual analysis of the two approaches. The concepts are presented and compared. In order to show the applicability in the business world, examples of large and small businesses are chosen to relate their relevancy to the theoretical findings. The core discussion is the question about the responsibility of business. Both approaches show a different understanding of the roles of shareholders and managers in the relationship of an organisation with its stakeholders. The profit ratio that is distributed to the shareholders is related to the benefits of the stakeholders. The seperation of society and business which is supported by the shareholder view is challenged by the stakeholder theorists in order to include responsibility as another measure of business success.