Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
Question: Describe about  management’s goals ever conflict with maximizing shareholder wealth?   Answer: Maximizing the wealth of the share holder’s is the appropriate goal of the business firm. The business firms try to maximize the wealth of the firm by increasing the price of the stock. With the increase in the price of the stock, there is an increase in the stock wealth. The increase in the price of the stock enhances the value of the firm and the net worth of the individuals increase owning the stock. There are instances in which the goal of the management conflicts with maximizing the share holder wealth (Hamel, 2009). The goal of the management is mobilization of the resources to make them productive which will generate revenue for the organization. The model of management that predominated earlier has become redundant. The overriding problems of the organization were solved by reinvention of the management system. The management system has become innovative and inspiring place which is concerned with maximizing the wealth of the share holders. But there have been situations of conflict with the maximization of the wealth of the share holder. One of the major false hoods that are associated with the publicly held companies is that it has the obligation to maximize the value of the share holder. In 2007, the companies of United States had taken debt of record amount to fund the repurchase of share to enhance the value of the share holder. These buybacks has served to enrich the CEO of the company at the expense of the important stake holders of the company. This diminishes the health of the economy and the long term future of the organization is affected. Maximizing the value of the shareholder has become a shared goal that aligns to serve the interest of the share owners and the management. Thus maximizing the value of the share holder is not the obligation of the manager but it is the choice of the manager. But in cases of take over and bankruptcy there are special laws to provide special consideration to the common stock holders (, 2011).   In case of small organizations, the manager of the firm owns the firm. In such cases there the conflicting situations does not arise. But in case of large organizations there are various levels of the management and the staff. But the management is not the owner of the firm (Harris and Glegg, 2009). They have a fixed level of income. But there are situations of conflict between the owner of the firm and the manager of the organization. The manager of the organization do not profit directly from the share holders unless they tend to own a stock. The conflict between the managers and the stock holders of the firm gives rise to the agency problem (Myers, 2007). The goal of the management is to maximize the wealth of the share holders and at the same time maintain the corporate social responsibility. But it is seen in several
OR is widely acknowledged for providing affordable essay help among students in Australia. Being a cheap essay assistance service, we provide additional offers and discounts on each order. However, students don't need to worry about the quality of the paper because writers always write each paper from scratch while including all relevant research. Some of our popular services include English essay help, math essay help, marketing essay help, etc. So quit thinking 'who can help with my essay' and place an order with us.

Most Downloaded Sample Of Management

Toulin Method Of Argumentation

Download : 279 | Page : 1

You are required to write a researched argument essay that convinces persuades the reader of your position / stance. This is an academic, researched and referenced document that demonstrates your understanding of the objectives of the course. The structure of the argument will follow the TOULMIN METHOD of argumentation.

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Consumer Behavior Assignment

Download : 208 | Pages : 9

Executive Summary The purpose of this report is to elaborate the factors which are considered by individuals before selecting an occupation. Choosing an occupation is indeed a major decision of everyone’s life and it does give a shape to where he would be heading in the course if time. The report begins with a list of various occupations which have been going since the human civilization started though it has indeed changed its form to...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Internet Marketing Plan For River Island

Download : 369 | Pages : 13

Introduction With the increase enhancement in the field of technology, it has been considered essential by the businesses to implement such technology in their business processes. Further, the increasing demand from the customers regarding the better quality of products and services delivered to their doorstep has also necessitated for the businesses to implement the e-business strategy in their business processes. E-business which is common...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Strategic Role Of HR In Mergers & Acquisitions

Download : 330 | Pages : 9

Executive Summary In a merger & acquisition, role of an HR has emerged as a very critical function. At each stage of merger and acquisition process, HR plays a strategic role. The importance of role of HR part in integration of the merged companies should not be taken lightly and should be handled very carefully and with due planning. At pre acquisition stage, due diligence should be taken before the start of the process and HR must carve ou...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Relationship Between Knowledge Management, Organization Learning And HRM

Download : 360 | Pages : 7

Introduction In this competitive business environment where every business organization is trying to attract the customers of each other, it becomes essential for these organizations to remain competitive by innovating new ideas and thoughts, so that value added products and services can be provided to the customers. The motive of such organization in providing value added services to their customers, require their employees to be quite effect...

Read More arrow Tags: Australia Arlington Management University of New South Wales 
Free plagiarism check online Free plagiarism check online on mobile
Have any Query?