MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.
-
Upload
edith-wilkinson -
Category
Documents
-
view
213 -
download
1
Transcript of MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.
![Page 1: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/1.jpg)
MANAGEMENT’S PRIMARY GOAL
STOCKHOLDER WEALTH MAXIMIZATION.
![Page 2: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/2.jpg)
SOCIAL RESPONSIBILITY
EMPLOYEES CUSTOMERS SUPPLIERS COMMUNITIES
![Page 3: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/3.jpg)
ETHICAL RESPONSIBILITY
PROVIDE SAFE WORKING ENVIRONMENT
AVOID POLLUTING AIR / WATER PRODUCE SAFE PRODUCTS
![Page 4: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/4.jpg)
SOCIALLY RESPONSIBLE ACTIONS HAVE COSTS AND IT IS QUESTIONABLE WHETHER BUSINESSES WOULD INCUR THIS COST VOLUNTARILY.
![Page 5: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/5.jpg)
ANY VOLUNTARY SOCIALLY RESPONSIBLE ACTS THAT RAISE COSTS ARE VIRTUALLY IMPOSSIBLE TO IMPLEMENT IN INDUSTRIES THAT ARE SUBJECT TO KEEN COMPETITION.
![Page 6: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/6.jpg)
HOW ABOUT OLIGOPOLISTIC FIRMS WITH PROFITS ABOVE NORMAL LEVEL?
![Page 7: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/7.jpg)
WILL INVESTORS AVOID SOCIALLY ORIENTED FIRMS BECAUSE RETURNS WOULD BE LOWER THAN OTHER FIRMS ?
![Page 8: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/8.jpg)
EVEN HIGHLY PROFITABLE FIRMS THAT ARE PUBLICLY OWNED ARE CONSTRAINED FROM TAKING UNILATERAL COST INCREASING SOCIAL ACTIONS.
![Page 9: MANAGEMENT’S PRIMARY GOAL STOCKHOLDER WEALTH MAXIMIZATION.](https://reader036.fdocuments.us/reader036/viewer/2022072011/56649de45503460f94adc51d/html5/thumbnails/9.jpg)
COST INCREASING ACTIONS ASSOCIATED WITH SOCIAL RESPONSIBILITY WILL HAVE TO BE PUT ON A MANDATORY RATHER THAN A VOLUNTARY BASIS.