Based on your professional or academic experience with corporate finance,

Part 1Based on your professional or academic
experience with corporate finance, discuss what shareholder maximization means
to you. What are the advantages and disadvantages of shareholder maximization
from the perspective of the CFO of an organization?Part 2reply to peers
emer.docx

joyce.docx

Don't use plagiarized sources. Get Your Custom Essay on
Based on your professional or academic experience with corporate finance,
Just from $13/Page
Order Essay

Unformatted Attachment Preview

Shareholder maximization is a fiduciary responsibility in US corporations, and the
management can be sued by shareholders if they feel that the company has failed to perform
(Ehrhardt & Brigham, 2017). Shareholder maximization means putting the best interest of
the shareholders as the top priority, even if that means being less socially responsible. While
that may have been the way business has been done historically, our countries values have
definitely changed, and many are now very aware of the social impact that companies
have. Being socially irresponsible can have a huge effect on the bottom line. Society has
embraced this change, but many in the business world have not. As one study showed, when
given a scenario of management decisions, evaluators were much more ready to forego
Corporate Social Responsibility (CSR) than financial measures from evaluations (Bento,
Mertins, White, 2016). Many organizations are now implementing CSR into their balanced
scorecard, recognizing that companies have a responsibility that extends beyond shareholder
maximization. The study goes on to reveal that the new balanced scorecard looks at the
company as a whole from 4 perspectives that include: how do we look to shareholders, how
does the customer see us, what must we excel at, and can we continue to improve and create
value. By including these 4 views the company has access to the following data: company
financial gains, value for customers, delivery of customer/shareholder satisfaction, and
innovation and learning. These elements provide a picture of the company that includes not
only a financial overview, but the company’s perception by others.
When a business focusses solely on shareholder maximization, the societal impact
becomes irrelevant. In today’s world, many will judge a company based on their concern for
the environment, as well as other factors. In this age, it becomes increasingly important for
corporations to consider more than just the profitability to the shareholders if they want to
remain in business.
Resources:
Bento, R. F., Mertins, L., & White, L. F. (2016). Ideology and the Balanced Scorecard: An
Empirical Exploration of the Tension Between Shareholder Value Maximization and
Corporate Social Responsibility. Journal of Business Ethics,142(4), 769-789.
doi:10.1007/s10551-016-3053-6. Retrieved April 29, 2018, from
http://web.b.ebscohost.com.ezproxy.snhu.edu/ehost/detail/detail?vid=4&sid=5ac41201-c8fd4006-99f4c48212397408%40sessionmgr102&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#
AN=123610047&db=bsu
Ehrhardt, M. C., & Brigham, E. F. (2017, p11). Corporate finance: A focused approach.
Boston, MA: Cengage Learning. Retrieved April 29, 2018, from
https://mbsdirect.vitalsource.com/?utm_source=affiliates&utm_medium=affiliates&utm_cam
paign=Ebates+Performance+Marketing%2C+Inc.#/books/9781305887220/?utm_source=affili
ates&utm_medium=affiliates&utm_campaign=Ebates+Performance+Marketing%2C+Inc.cfi/
31!/4/4@0.00:0.00
What shareholder maximization means to me is that the company cares for only one thing –
profit. Working for a Credit Union that does not put profit before service is, in my opinion,
more important and is a key ingredient to a successful company. There are many
disadvantages to focusing on shareholder maximization such as bad business practices,
forgetting about the customer/member and employees.
• One recent example of bad business practices was the issue with Wells Fargo Bank
(WFB). WFB was securitized for putting a lot of pressure on employees to meet daily
goals, in that, it was somewhat implied that that is what caused employees to
fraudulently open accounts without the knowledge of customers but rather the gain of
the bank.
• “Corporation that concentrate on maximizing shareholder value might lose focus on
what customers what, or might do things that are not optimal for consumers.”
(Hamel,2018).
• Employment retention or satisfaction is negatively affected. Companies that seek
maximization profit as a priority tend to focus on hiring cheap labor, thus possibly
outsourcing to foreign workers.
And on the flip side, there are advantages as well such as increased returns or strategic
consistency.
• “The most overt advantage of a wealth maximization goals is that you can make
money for all owners of the business.” (Kokemuller,2018).
• “Whatever your goal, a clear focus on an overall strategic objective helps you create
consistency in business decisions.” (Kokemuller,2018). All decisions made will relate
to this objective consistently. For example: The provider or vendor that provides you
the highest return and lowest investment cost will always be your choice.
References:
Hamel, G. (2018). Negatives of Maximizing Shareholder Value. Retrieved on April 28, 2018,
fromhttp://smallbusiness.chron.com
Kokemuller, N. (2018). The Advantages of the Maximization of Shareholder Wealth.
Retrieved on April 28, 2018, from https://yourbusiness.azcentral.com

Purchase answer to see full
attachment

GradeAcers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

Order your essay today and save 15% with the discount code DISCOUNT15