Discuss the arguments between the economic model and stakeholder theory.
What will be an ideal response?
The economic model argues that the firm should be managed for the sole benefit of stockholders. This view is justified by appeal to the rights of owners, the fiduciary duty of managers, and the social benefits that follow from this arrangement. Stakeholder theory argues, on factual, legal, economic, and ethical grounds, that this is an inadequate understanding of business.
Stakeholder theory argues that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management. As a descriptive account of business, the classical model ignores over a century of legal precedent arising from both case law and legislative enactments. While it might have been true over a century ago that management had an overriding obligation to stockholders, the law now recognizes a wide range of managerial obligations to such stakeholders as consumers, employees, competitors, the environment, and the disabled. Thus, as a matter of law, it is simply false to claim that management can ignore duties to everyone but stockholders.
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Cost containment practices by a firm would not be effective for cost increases caused by
a. inflation. b. a reduction in the quantity of an input purchased. c. normal seasonality. d. a reduction in the number of suppliers.
Considering how the freedom of the Internet impacts communications rights and responsibilities, it is evident that ________
A) ensuring freedom of speech is not as easy as it sounds B) the court of public opinion outweighs the court of law C) technology limits everyone's legal rights D) a new constitutional amendment may be in order
Which of these is NOT true with regards to the duties of the owner of a trade secret?
A. The owner is obliged to take all reasonable precautions to prevent the secret from being discovered by others. B. The owner will not be protected by state unfair competition laws if he or she fails to take all reasonable precautions to protect the secret. C. Reasonable precautions may include fencing in buildings, placing locks on doors, and hiring security guards. D. The owner of a trade secret has an absolute right to the secret and, as such, need not do anything to prevent the secret from being discovered by others.
Which sentence uses correct capitalization?
A) George H. W. Bush, past President of the United States, went skydiving on his ninetieth birthday. B) George H. W. Bush, Past President of the United States, went skydiving on his ninetieth birthday. C) George H. W. Bush, past president of the United States, went skydiving on his ninetieth birthday.