ADM 1301 Chapter Notes - Chapter 3: Stakeholder Theory

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In canada, business operates in a pluralistic social system where a variety of groups and institutions use power or influence to represent the interests of particular groups of citizens. Business is subject to the influence of other institutions in society and must respond to the various participants in society. A stakeholder is an individual, or group, who can influence and/or is influenced by the achievement of an organization"s purpose. All stakeholders have expectations (reasonably priced goods, good quality etc. ) Individuals or groups who have invested in the form of equity, or shares. Depending on the size of the organizations, the number of shareholders will vary. A shareholder in a large corporation will not have the same importance as in a smaller corporation. Directors are elected by shareholders to represent their interests. The purpose of a board of directors is to determine the corporation"s strategic direction, monitor and review the corporation"s performance, and hire and fire top executives.

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