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Shareholders influence managerial behavior primarily through their voting power and ability to elect the board of directors, who oversee management. They can also impact decisions by expressing their preferences and expectations, particularly during annual meetings or through shareholder proposals. However, the extent of this control varies based on the ownership structure, with institutional investors often playing a more significant role than individual shareholders. Ultimately, while shareholders can exert influence, managers retain substantial autonomy in day-to-day operations.

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