This article describes the two strategy theories according to which decisions are made (stakeholder or shareholder) and ends with observations of the attitudes of my classmates and personal beliefs and conclusions.
As the title announces, this article reflects two types of possible strategies: shareholder or stakeholder. I will start with the definition of a shareholder and a stakeholder, so that we can focus on the same parameters. According to the Business Dictionary, a shareholder is “an individual, group, or organization that owns one or more shares in a company, and in whose name the share certificate is issued”, while a stakeholder is “a person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies. Key stakeholders in a business organization include creditors, customers, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.”
Where lays the difference between the two? The difference comes from the mind set of manager. If he/she has a shareholder perspective, he/she will focus on profitability at the hour of making a decision. Good examples of this are banks and large corporations that trade on the stock exchange; however one needs to know the way a manager thinks in order to make a decision about whether a strategy is shareholder or stakeholder, making this kind of examples not generalizable. The shareholder perspective focuses on the interests of its main stakeholders at the hour of making a decision. Good examples of this are German and Nordic companies that tend to have the employee as main stakeholder. However, the same observation as before needs to be taken into account, that it cannot be generalized that all German and Nordic companies are stakeholder, as it cannot be generalized that reversely all American and British companies are shareholder.
Same question: where lays the difference between the two? One controversial example: corporate social responsibility. A shareholder company does it because it thinks that this way the interested audiences will consume more of its product, be identifying themselves more with the company. In this case, it acts as a marketing tool addressed to increase profits. On the other hand, a stakeholder company wants to improve the well-being of the society, as it sees it as one of its stakeholders. It believes that the well-being of society has a direct effect on the well-being of the company. With that being said, I am disgusted by CSR aimed at making up for thirst of money. It is the case of a particular bank that would yearly gather funds for South Africa, as a CSR tool. This is giving the person fish and not teaching them how to fish and I am completely against it.
Whether a person takes decisions stakeholder or shareholder depends greatly on one’s inner motivation. There are people that are uniquely motivated by money and cannot understand how stakeholder companies can function (this is the case of my classmates). The necessity for this article came as my fury shone confronted with future shareholder strategists. I said it before, I am writing it now: I am willing to earn less money if I am working in a company where I am happy. With that being said, an important observation needs to be made: having a stakeholder mind set does not mean not being profitable, it is just that decisions are not taken with profitability as main objective.
Conclusion time and more explanation. I am against investment bankers. I haven’t met one so far that I would respect and I am completely disgusted by people whose only motivation can be money (and they are present in all industries). I am disgusted by their greed and their arrogance. I would like to be able to say that there are exceptions everywhere, but I am afraid I haven’t met one so far as far as investment bankers are concerned. PROVE ME WRONG.
P.S. On a different note, the article about Steve Jobs is work in progress that will soon be released.
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