Is Shareholder Wealth Maximization Immoral?

Is Shareholder Wealth Maximization Immoral?

Dobson, J. (1999). Is Shareholder Wealth Maximization Immoral?. Financial Analyst Journal, 69-75

In the article above, John Dobson effectively evaluates shareholder wealth maximization, clearly helping to foster the understanding of its objective with respect to justifying the behavior in business. With respect to the above, the author has shared useful insight with respect to the discussion of the financial, economic theory upon which the question of the morality of the shareholder wealth maximization finds the basis. Ideally, the reading challenges one understands and perception of the financial, economic theory bringing forth the foundation for constructive discussion based on the integral financial matter it covers.

In as much as the wealth maximization concept provided by the financial, economic theory finds significant criticism, the basis upon which it finds its justification is relatively strong. The reason for the above is that in as much as a corporation may want to adhere to various social ethics and values; it remains indebted to the stakeholders than to the general public. In fact, shareholder maximization is an ideal ideology with the reference that it ensures that the stockholders are comfortable and satisfied at all time. Every business owes a lot to the shareholders for its survival. In the event that the general society is unhappy with a business organization, there still are chances of survival. However, unsatisfied shareholders mean the end of the business thus the justification of the shareholder wealth maximization concept of the financial, economic theory.

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