Stakeholders Theory

Running head: STAKEHOLDERS THEORY
Stakeholders theory
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STAKEHOLDERS THEORY
CEOs are starting to bank billion dollar bonuses with IPOs
The article chosen here states how the chief executing officers of the start-ups of
China are provided with bonuses. The article states the rich amount which are provided to the
CEOs are coming at the expense of future shareholders which will push startups to take on
public investors. The startups are been kept private as there is a presence of plenty of private
capital to keep them going (Jensen, 2017). The bonuses related to Initial Public Offering
performs to bulk up the share of the founder. The article states how the stakeholder theory are
to be applied while providing bonus to the chief executive officers of the startups of China.
Stakeholders Theory
The theory consisting the ethics of the business and organizational management and
which also directs both values and morals in managing the organization is termed as
stakeholder theory. The strategy of the stakeholder view integrates both views include market
and resource based and also adds to the socio political level. One of the most common
version of the stakeholder theory seeks to define the specific stakeholders of a company
(Antonelli, D'Alessio & Cuomo, 2017). The stakeholder theory consists of an ethical,
normative and positive branch. This theory can be used as an umbrella term that addresses
issues which are associated with the relationship with the stakeholders. The managerial
branch of the stakeholder theory refers to the issues of the power of the stakeholders and how
their relative power affects the organisation with the expectation of the stakeholders. The
normative perspective of the stakeholder theory states that all stakeholders should be fairly
treated and the issues are not directly relevant. Stakeholder theory is different from
Legitimacy theory in a way that it refers to a particular group within a society. The branch of
the Stakeholder theory which is managerial states that the corporate management are likely to
attend the expectations of stakeholders (Strand & Freeman, 2015). This theory mainly