What Are the Implications for Other Stakeholders When Managers Focus

question 24

Essay

What are the implications for other stakeholders when managers focus continuously, and exclusively, on a select stakeholder group?

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Definitions:

Direct Controls

Government policies that directly constrain activities that generate negative externalities. Examples include maximum emissions limits for factory smokestacks and laws mandating the proper disposal of toxic wastes.

Economic Efficiency

A situation where resources are allocated in a way that maximizes the net benefit to society or achieves the desired output with the least waste.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction or activity, not reflected in the transaction's price.

Traffic Congestion

A condition on road networks that occurs as use increases, and is characterized by slower speeds, longer trip times, and increased vehicular queueing.