Final answer:
The managerial view focuses on top managers' duty to maximize stock market valuations and aligns with shareholder primacy but is challenged by stakeholder theory. As firms grow, external investment becomes more accessible due to increased public information. Additionally, regulatory bodies like OSHA serve to moderate a sole focus on profitability.
Step-by-step explanation:
The managerial view is a perspective in business that emphasizes the responsibility of top managers to maximize the firm's stock market valuation, often referred to as shareholder value. This approach aligns with the concept of shareholder primacy, which dictates that managers should prioritize increasing shareholder wealth. Nonetheless, this view is contrasted by the stakeholder theory, which advocates for balancing the interests of various stakeholders, not just shareholders, in a firm's decision-making process.
When a firm is on the path to stability and profitability, familiarity with individual managers and their business plans becomes less crucial due to the availability of information about the firm's products, revenues, costs, and profits. As a result, outside investors such as bondholders and shareholders, who are not personally acquainted with the managers, may become more inclined to invest.
Historically, governmental agencies like OSHA have established regulations to ensure workplace safety and counterbalance the sole pursuit of profit, which shows another aspect of business beyond stock valuations. Furthermore, while the ideal of a market-oriented economy suggests firms are best positioned to determine efficient and customer-attracting practices, the reality of monopolies challenges the notion that all top executives favor market competition, as being without competitors can be far more lucrative.