With regards to corporate social responsibility, do the needs and wants of the shareholder come before

the stakeholder is the real question. The shareholder theory argues that it is the primary duty of the
manager to make the most of the shareholders return. While on the other hand, the stakeholder theory
argues that the primary duty of the manager is to equalize the financial interests of the shareholders
alongside the interest of additional stakeholders such as consumers, employees and the community
regardless if it lessens shareholder returns (Smith, 2003). The shareholder versus stakeholder debates
continues to argue that shareholders enhance capital to an organizations managers, which are expected
to apply corporate funds according to the authorization by shareholders. Conversely, the stakeholder
theory stresses that managers have an obligation to those contributing individuals and the
organizations shareholders to make certain that stakeholders ethical rights are not breached (The
Economist, 2010).
Managing a company does not authorize a manager to infringe on the standards and norms of society.
However, managing a company institutes a new set of ethical concerns based upon stakeholder
obligations and shareholder interests. As more power is gained by organizations, the pressure to identify
and tackle their responsibilities and obligations will increase. Therefore, both the stakeholder and
shareholder perspectives need to be considered when making business decisions as a leader.
References
Smith, J. (2003, July 15). The shareholders vs. stakeholders debate. Retrieved from
http://sloanreview.mit.edu/article/the-shareholders-vs-stakeholders-debate/
The Economist (2012, April 22). Shareholders vs. Stakeholders: A new idolatry. Retrieved from
http://www.economist.com/node/15954434