Question

What did the decision in; Shlensky v. Wrigley; (1968) establish in ethical terms? How does it compare to the decision in; Dodge v. Ford Motor Company; (1919)?

a) It established the primacy of shareholder interests.
b) It established the primacy of stakeholder interests.
c) It upheld Ford's decision to prioritize shareholder wealth.
d) It upheld Wrigley's decision to prioritize stakeholder interests.

Answer 1

The decision in Shlensky v. Wrigley (1968) established the primacy of board of directors' fiduciary duties in favor of shareholder interests. This decision contrasts with the decision in Dodge v. Ford Motor Company (1919) which upheld Ford's decision to prioritize stakeholder interests.

Step-by-step explanation:

The decision in Shlensky v. Wrigley (1968) established the primacy of board of directors' fiduciary duties in ethical terms. The court ruled that the board of directors must act in the best interests of the shareholders rather than prioritizing stakeholder interests. This decision aligns with the concept of shareholder primacy, which holds that managers have a duty to promote the interests of shareholders.

On the other hand, the decision in Dodge v. Ford Motor Company (1919) upheld Ford's decision to prioritize stakeholder interests over shareholder wealth. The court acknowledged that a corporation should consider the welfare of various stakeholders including employees, customers, and the community, rather than solely focusing on maximizing shareholder profits.