Responsibility of Managers towards Stakeholders

MANAGEMENT 1
MANAGEMENT

MANAGEMENT 2
Introduction
With the increased globalisation, the management activities have become complex,
with wide range of stakeholders and thus, execution of the management functions have
become crucial for long term success and overall growth of an entity (Katamba, Zipfel, Haag
& Kazooba, 2012). The entities employ professionals in the form of managers who are
entrusted with the responsibility of managing the affairs, making the strategic and operational
decisions on behalf of the owners or the shareholders of a corporation. The thesis statement
of the essay is that managers of a company are equally liable towards the various
stakeholders of an entity and not just the shareholders or the ones who have invested their
money in the entity by acquiring the shares or investing their capital.
Arguments against
A section of the population holds the belief that the managers have the prime
responsibility of addressing the interests of the shareholders only. This is because an owner
invests his or her amount in a business, partners contribute towards capital and even large
sized organisations in the form of companies acquire the share capital from the shareholders
and allot their shares in return of the same. Thus, the shareholders invest their money in an
enterprise and get shares in profits in return. While the section regards the shareholders as
chief beneficiary, the same is of the opinion that profit earning is the key motive of the
company (Moon, 2014). Thus, the incidental belief is that the business decisions must be
based on the criteria of maximisation of earnings which can be further distributed among the
shareholders.
Arguments in favour
However, another section of people hold the view that there exists a number of
stakeholders to an entity namely the employees, regulators, investors, consumers,
environment and society as a whole. The major argument in the favour of these stakeholders
is that they equally contribute towards the success of an entity in the form of provision of
natural and monetary resources used by the business, services as rendered by the employees,
infrastructure and space allowed by regulators and finally consume the products in the form
of customers (Morrison, 2015). Thus, business has an equal responsibility towards these
stakeholders as well.