Final answer:
The answer to the fill-in-the-blanks question is (e) stakeholder, stakeholders. This represents a business philosophy that takes into account the broader range of interests and impacts a company has beyond just its shareholders. Understanding the difference between shareholders and stakeholders is key to recognizing evolving corporate practices and responsibilities.
The correct option is e.
Step-by-step explanation:
By incorporating stakeholder objectives into corporate core values, companies begin to view stakeholders as significant. The correct answer is option (e) stakeholder, stakeholders.
This distinction underscores two different approaches to running a business: the shareholder theory, which prioritizes the interests of shareholders, and the stakeholder theory, which considers the interests of a wider group including employees, customers, communities, and shareholders.
Milton Friedman's argument favored shareholders, proposing that companies should focus on maximising shareholder wealth. Conversely, stakeholder theory suggests balancing the interests of all stakeholders involved in or affected by the company's operations.
Understanding the differences between shareholders and stakeholders is crucial. Shareholders are those who have invested capital in a company and own a portion of that company. Stakeholders, however, encompass a broader group that includes anyone who has an interest in a business, such as government agencies, customers, and employees.
The shift from a shareholder-centric view to a stakeholder-centric one is evident in modern corporate practices and the legal and ethical expectations of companies.
As corporations have expanded their rights, questions have arisen about their moral responsibilities to different groups beyond just shareholders. The broader recognition of a range of stakeholders mirrors contemporary concerns about corporate accountability and social responsibility.
The correct option is e.