To increase the monetary value of the corporation and thus satisfy the
demands of the stock-holders and other investors (share-holders) for
maximum profits. This model is widespread these days.
Not only the interests of the corporation owners (share-holders),
but also the interests of all those who in one way or the other are
responsible for the company's success and survival as stake-holders:
investors, employees, suppliers, customers, the society as a whole.
Managers share directly or indirectly in the company's profits.
Often they themselves are part-owners of the firm.
Managers are trustees of the corporation and moderators, who have to balance
out the claims of all those contributing to or affected by the company's success.
• The value-increase of the corporation can be purchased at the cost of
other people to whom the firm is responsible, to the workers, for instance.
• Managers who are one-sidedly fixed on the growth of the firm's monetary
value tend to make short-term decisions at the cost of long-range sustainability.
It is not always clear who should be counted as stake-holders.
Claims of the stake-holders on a corporation
• Shareholders and investors expect a secure investment and increased value for their investments.
• The employees expect just wages, a friendly, motivating work climate and job security.
• The suppliers expect prompt payment and fair, long-range delivery relationships.
• The customers expect quality products at fair prices.
• The public, representing the political and social structures, expects a
contribution to the improvement of the common good (e.g. through the creation of
jobs, payment of taxes, social engagement etc.) in return for the provision of
public goods comprising the infrastructure, security, education, etc. which are
the very presuppositions of economic activity as a whole.
