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Business decisions are not made in a vacuum – decision makers have some objective in mind. As a result, Japanese Language Translation workers suggest that business must operate on the assumption that management’s primary goal is stockholder wealth maximization, which translates into maximizing the price of the firm’s common stock. Naturally, the optimization of stock price is not the only concern that business makers consider when executing a decision. For example, managers might also consider their own personal desires, the consequences to employees, and the effects on a community. Although alternative criteria may enter into the decision making process, an ethical manager will always place the greatest consideration on how it will influence stock price. Arabic Language Translation Stockholders own the firm and elect the management team. Because stockholders elect the management team, management must uphold the wishes of stock owners..

Yet because many different interests own stock, managers the directives given to managers can sometimes be conflicting. This being the case, might not managers pursue goals other than stock price maximization? If we all take a moment, we can probably think of stories covered by the media about how executive made decisions that didn’t maximize revenue to exchange for better employee benefit programs, charitable contributions and even attractive executive salaries.

Therefore, it is often impossible to follow the decision making actions of decision makers in an effort to ensure they comply with the best wishes of the stock holders. Further, how would a Russian Translation employee even begin to go about collecting evidence to show that employee benefit or community improvement projects are in the best interest of stockholders? Further, are executive salaries that sometimes exceed a hundred million dollars really necessary to attract worthy and effect leaders? However, if the intentions of managers don’t fit the needs of the majority of stockholders then you can count on that manager or management team being replaced by more suitable candidates. In fact, if the entire team of managers is felt to be inadequate by stockholders then hostile takeovers or even proxy fights might take place in order to remove the team.

A hostile takeover is a type of corporate takeover which is carried out against the wishes of the board of the target company. In most cases, the firm that is the target of a takeover attempt will either try to increase the value of the stock or make it unattractive to potential parties in the acquisition attempt.

Corporate leaders must also make a choice between their commitments to being socially responsible in lieu of profit maximization. Such questions as whether a company should forgo charitable contributions and outstanding employee benefits must be weighed against maximizing the value of stock.

Certainly firms have an ethical responsibility to provide a safe working environment, to avoid polluting the air or water, and to produce safe products. However, socially responsible actions have costs, and it is questionable whether businesses would incur these costs voluntarily. If some firms do act in a socially responsible manner while others do not, then the socially responsible firms will be at a disadvantage in attracting capital.