Question

Discuss the difference between Shareholder and Stakeholder theories of business, with reference to issues concerning the environment.

Answer 1

Shareholder theory	Stakeholder theory
A shareholder owns part of a company through stock ownership.	A stakeholder is interested in the performance of a company for reasons other than just stock appreciation.
Advocates of the stockholder theory focus on the different functions that organizations can fulfill. Private businesses, according to this theory, generate wealth by seeking to make maximum profits to pass on to their shareholders.	Advocates of the stakeholder theory believe that businesses owe their existence to a greater community. This brings a basic duty to enrich and improve the well being of this community. If this does not happen, an impoverished or dysfunctional community will interfere with the proper activity of all its businesses.