Resource title

Shareholder, stakeholder-owner or broad stakeholder maximization

Resource image

image for OpenScout resource :: Shareholder, stakeholder-owner or broad stakeholder maximization

Resource description

With reference to the discussion about shareholder versus stakeholder maximization it is argued that the normal type of maximization is in fact stakeholder-owner maxi-mization. This means maximization of the sum of the value of the shares and stake-holder benefits belonging to the dominating stakeholder-owner. Maximization of shareholder value is a special case of owner-maximization, and only under quite re-strictive assumptions shareholder maximization is larger or equal to stakeholder-owner maximization. Broad stakeholder maximization is the sum of the returns to all stake-holders also including the shareholders of a company. Although it may be the ultimate goal for Corporate Social Responsibility to achieve this kind of maximization, broad stakeholder maximization is quite difficult to give a precise definition. There is no one-dimensional measure to add different stakeholder benefits not traded on the mar-ket, and therefore there is no possibility for practical application. Broad stakeholder maximization instead in practical applications becomes satisfying certain stakeholder demands, so that the practical application will be stakeholder-owner maximization un-der constraints defined by other stakeholders’ interests. These constraints vary for dif-ferent stakeholder owners and new standards for Corporate Social Responsibility and more active political consumers will strengthen these constraints.

Resource author

Niels Mygind

Resource publisher

Resource publish date

Resource language

eng

Resource content type

application/pdf

Resource resource URL

http://hdl.handle.net/10398/6613

Resource license

Check the according license before adaptation. When adapting give credits to the original author.