Directions: You may choose group 1 or 2

The traditional finance view (group 1) or stockholder's view (group 2) is that the corporation has a legal obligation to focus on creating wealth for the shareholders. An opposing view, called the stakeholder view, holds that the corporation needs to focus on the needs of all its stakeholders. After viewing the video, you should be able to answer the questions for the group you were assigned.

Explore this Video for Unit 1: Stakeholder Definition Investopedia

https://youtu.be/hYnszpyPg_8

Group 1: Shareholder

This group has the traditionalist viewpoint, which means you agree with the American economist Milton Friedman, who "In a 1970 New York Times Magazine essay, [argued that the sole] Responsibility of Businesses is to increase its profits [for shareholders]" Northrop, E. 2013). In other words, you agree that the mission of a firm is to increase the wealth of the shareholders/stockholders.

Answer the following questions:

Are corporations obligated to pursue the interests of shareholders, perhaps at the expense of other stakeholders?

After all, the shareholders own the corporation, so shouldn't they come first?

Isn't the purpose of business to earn a profit?

Group 2: Stakeholder

This group has the stakeholder's viewpoint, which means you disagree with the traditionalist view that the mission of a firm is to increase the wealth of the shareholders/stockholders.

Answer the following questions:

Do corporations need to pay attention to other stakeholders as well as shareholders?

If so, should it focus equally on all stakeholders, or are there some stakeholders whose interests should be prioritized?

If you have the stakeholder view, how do shareholders fit into the mix?