Following the Sandy Hook murders, Cerberus Capital Management, a very large private equity firm, conducted a failed auction to sell one of its companies, Freedom Group (now Remington), which makes the Bushmaster rifle that was used in the school shootings. Apparently, the California State Teachers' Retirement System, which had $750 million invested with Cerberus, encouraged the auction. Cerberus then kept Remington and bought out investors who wanted to sell. Cerberus explained its thinking: "As a firm, we are investors, not statesmen or policymakers. Our role is to make investments on behalf of our clients. It is not our role to take positions or attempt to shape or influence the gun policy debate."

a. Do those Cerberus decisions represent a shareholder or stakeholder approach to management? Explain.

b. As you develop your own financial portfolio, should you decline to hold investments in gun companies? Explain