Final answer:
The decline of the shareholder view of management is due to the singular focus on shareholder value, which often led to a lack of investment in innovation and an erosion in quality standards, prompting a shift towards stakeholder theory that accounts for the interests of all stakeholders, not just shareholders.
Step-by-step explanation:
The reason for the decline of the shareholder view of management is most accurately captured by the criticism that a singular focus on shareholder value led to unintended negative consequences. Specifically, option c, 'The singular focus on shareholder value resulted in a lack of investment in new products and an erosion in quality standards,' reflects the core issue. It suggests that a preoccupation with maximizing shareholder wealth often came at the expense of other important business elements such as innovation and quality.While the shareholder theory emphasizes the primacy of shareholder interest in firm management, the emergence of stakeholder theory indicates a shift towards a more balanced consideration of all parties involved with or affected by the firm. This includes employees, customers, suppliers, and even communities, recognizing that their interests also play a critical role in the long-term success and sustainability of the business.The stakeholder theory suggests that companies have a responsibility to a broader group of stakeholders, not just shareholders. Therefore, when a company overwhelmingly focuses on shareholder returns, potentially sacrificing product development and quality, it can lead to dissatisfaction among other stakeholders, ultimately causing a decline in the shareholder-centric management model.