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BGS: Business & Society (Forces that Shape Business & Society…
BGS: Business & Society
Ownership Theory
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Fiduciary Duty
In U.S. law, firms have fiduciary duty to ensure that they operate in the best interest of owners
Stakeholder Theory
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Fiduciary Duty
Most states have passed laws that permit managers to take into consideration a wide range of stakeholders' interests
Stakeholders Concept
Market Stakeholders
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E.g. Customers, Creditors
Non-market Stakeholders
Does not have economic transactions, but actions could affect firm
E.g. Government, NGOs, Community
External Stakeholders
Have important transactions with firm,
but not employed by them
Customers, Creditors, Government
Internal Stakeholders
Work "inside" the firm,
contribute to daily operations
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