The Debate between the Shareholder and Stakeholder Theories Essay

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There is a need to adopt a multifaceted approach when pondering how work fits into biblical categories. Keller (2014) addresses the notion of using a single verse of principle to view work. He states that the meaning of vocation is that being as generous as possible after making money at work is a way of serving God. However, Smith (2003) elaborates on yet another perspective of evaluating Keller’s (2014) sentiment regarding service to God. The debate between the shareholder and stakeholder theories is divergent on making as much money as possible to share it with other people.

Our work is shaped by Christian witness, ethics, worldview, identity, and motives. This statement implies that there is no specific principle or verse that offers a well-rounded understanding of work. Smith (2003) illustrates the dilemma in which companies are regarding serving the stakeholders’ interests and maximizing their shareholders’ value. According to the stakeholder theory, the local community, customers, suppliers, shareholders, and employees are all important entities of the company – stakeholders (Smith, 2003). Thus, as shareholders, managers are charged with the responsibility of ensuring a balance when making decisions concerning stakeholders and protecting their ethical rights from possible violations by shareholders. On the other hand, the shareholder theory argues that, since shareholders are the ones generating the capital needed by the organization, managers need to spend this money in accordance with the particular ways as dictated by shareholders. This conflict of interest results in a dispute between these two sides of the organization, creating a dilemma.

The stakeholders’ viewpoint is that the profitability of the business is not as significant as their interests. This stance is somewhat related to Keller’s (2014) sentiment regarding making as much money as possible to share it with other people generously as a way of serving God at work. Similarly, Bhattacharya (2017) adds that serving humanity is equal to serving God. One way of helping people is by being generous and sharing with them the payment received from work. This statement is closely linked to the argument by Keller (2014) that God created people to work, earn, help each other, and make the world a better place. Indeed, maximizing the shareholder value is not a good approach, although it may boost a company’s profitability. In the light of stakeholder theory claims, Keller (2014) argues that we should not work and earn money to glorify ourselves because that would be idolizing it. Instead, people need to take the right attitude by positively impacting society through generosity. Serving others, especially the less privileged, makes one feel fulfilled, and this is the basis of the stakeholder theory.

Companies need to shift from holding their shareholders highly because of their profitability to the business and focus more on maximizing stakeholders’ value. As Smith (2003) argues, customers, suppliers, and the local community deserve consideration in the proceeds of the company. This viewpoint is similar to what Keller (2014) states that after making enough money, it is prudent to be generous since it is a way of serving God at work. However, it is important not to misunderstand the stakeholders’ theory and mistaken it with discouraging a company from focusing on profitability. Another thing to note is that shareholders are a part of the stakeholders, which calls for a need to balance all their interests through profits and consideration. Therefore, I agree with the perspective that serving God at work is making as much money as possible and then sharing it with others with a goal to make the world a better place.

References

Bhattacharya, S. (2017). Be An Inspirer. Web.

Keller, T. (2014). Every good endeavor: Connecting your work to God’s plan for the world. Hodder & Stoughton.

Smith, J. (2003). The shareholders vs. stakeholders debate. MIT Sloan Management Review, 44 (4), 84-91.

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