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Will managers always make decisions that will be in the best interests of shareholders?
No. Their pay arrangement can give you a good indication as to how well they will act on the shareholders' behalf.
What is the relationship between shareholders and managers?
When you hold a share of a company, you are an investor in the company. You have invested your money in the company and it is the prime goal of the company's management to ensure that they earn sufficient revenue and profit for you "the investor" who has invested in the company. Ideally speaking, shareholders can be considered as owners of the company and the managers can be considered as employees working for the company.
Why conflict can happen between stakeholder?
Stakeholders are customers, competitors, society, government, managers, workers, shareholders... These stakeholders have different objectives: Shareholders want more profits but managers want the business to expand so as to receive more salary and increase their status. In this case, if managers decide to expand the business, the shareholders will receive less dividend since the money is used for the expansion, thus there is a conflict.. Customers want a better quality of products and a cheaper price. Society wants businesses to use environmentally friendly materials. Workers want a secure job and maybe a high pay...
3 kinds of managers?
there is 3 kinds of managers... there's line managers who are constantly figuring out how to do things at the low level and do it better. There's the strategist managers: normally director level management at larger companies who are focused on the core strategy and the big picture. Then there's executive level management who are focused on outward company strategy such as how they fair against their competitors, how they plan to win shareholders hearts, etc.
What influence do managers have on a business?
Managers affect the morale, success and likability of the business. Customers will continue to give their business to a store where the Manager makes sure the Employees treat them well and provide excellent service.
How managers can be motivated to act in the shareholders' interest?
Profit sharing, the more money the manager makes, the more the shareholders make.
How are managers bonded to shareholders?
1. Shareholders determine the membership of the board of directors by voting. 2. Contracts with management and arrangements for compensation can be made so that management has an incentive to pursue shareholders' goals. 3. Fear of a takeover gives managers an incentive to take actions that will maximize stock prices 4. Competition in the managerial labour market may force managers to perform in the best interest of shareholders. Firm willing to pay the most will lure good managers.
How can managers be encouraged to act in shareholders best interest?
Managers can be encouraged to act in their shareholders best interest by linking their pay to the stock price. When they are motivated by compensation then they will do things to make the share price increase.
Will managers always make decisions that will be in the best interests of shareholders?
No. Their pay arrangement can give you a good indication as to how well they will act on the shareholders' behalf.
What are three legal controls that affect the way in which business operate?
government,shareholders and the managers
Who are the internal stakeholders in bank?
01.employees 02.shareholders 03.managers/management
Who are internal stakeholders in a bank?
01.employees 02.shareholders 03.managers/management
Who are the internal stakeholders in a bank?
01.employees 02.shareholders 03.managers/management
Who do external auditors report to?
The report is always directed the shareholders ,partners ,managers ,directors or members of board.
Do financial managers need only concentrate on meeting the needs of shareholders?
Partially Yes. Enhancing Share holder wealth is one of the most important goals for managers.
Why is shareholders' wealth maximization the main objectives of the firm?
since the shareholders are the owners of the organization and therefore seek the attainment of their objectives.that is shareholders prioritizes the increase in their invested incomes and thus employ agents who happen to be managers in order to facilitate this.maximization of the company profit increase the value of the company`s and the shareholders will be assured of a favorable dividend,thus managers must attain the objectives of their principal first otherwise the principal agent problem will arise.
Can managers control employee behavior?
The managers can't directly controlthe employee behaviour but they can influence there behaviour by them(managers) being a role model that the employee would look up to and follow after them.So managers can control the employee through influence.
