1. Retired Costco CEO James Sinegal says high employee pay makes for good business. How can that be so?
2. Professor William Beaver writes, “And what of the stakeholder model? Beyond generating some academic interest, perhaps the best that can be said is that although corporations will not be unmindful of their other stakeholders, the latter’s concerns will remain a distant second to those holding the share.” Will shareholders or other stakeholders dominate corporate thought in the coming years? Explain.
Stakeholder theory and corporate social performance have gained great credibility with academics and many managers. Others, however, argue that profits and share-holders must remain the consuming concerns of management, and that a skilled focus on the bottom line will, incidentally but inevitably, result in the greatest good for society. That is, the company that maximizes its profits necessarily does not only what is best for its shareholders but also what is best for society generally.