The Argument Against a Shareholder Model and in Favor of a Stakeholder

question 134

Multiple Choice

The argument against a shareholder model and in favor of a stakeholder model rests in part on the notion that:

• A) Corporations are legally sanctioned by the government and thus the rights of shareholders are not unlimited.
• B) According to utilitarian ethics, managers have a moral obligation to consider all perspectives.
• C) According to libertarian ethics, managers must preserve the freedom of all stakeholders in their decision-making.
• D) A focus on short-term profits will, in the long run, maximize utility in society .

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Definitions:

Relative Poverty

A condition where a person lacks the minimum amount of income needed in order to maintain the average standard of living in the society in which they live.

Poor Countries

Nations characterized by a low standard of living, underdevelopment, and low income per capita, often facing challenges such as limited access to education, healthcare, and resources.

Modernization Theory

A theory suggesting that traditional societies will develop as they adopt more modern practices, technology, and cultural values, leading to similar patterns of social, economic, and political progress among societies.

Dependency Theory

A theory suggesting that economic developments in wealthy nations often lead to continued poverty in poorer countries due to the dependence on the global economic system.