Final answer:
The assertion that the first 'law' of business is to only take care of the shareholders is false. The stakeholder theory, which suggests that a company's interests involve various parties and not just shareholders, offers a broader management approach.
Step-by-step explanation:
The statement that the first 'law' of business is 'take care of the shareholders' is false. While this concept, known as shareholder primacy, dictates that managers must primarily act in the interest of shareholders who invest in the company, an alternative approach called stakeholder theory suggests that managers should balance the interests of all parties involved with the firm.
The stakeholder model recognizes a broader group of interests beyond just shareholders, including employees, customers, suppliers, and the community at large. Moreover, historical context shows that regulations such as those enforced by OSHA have been implemented to protect the broader interests of workers, demonstrating a shift from the early times of industrial capitalism where there was little protection for stakeholders other than shareholders. This shift underlines the importance of considering multiple stakeholders in modern business management strategies.