Download Who benefits from wealth maximization

Who benefits from wealth
maximization
Stakeholders:
Owners: Shareholder wealth maximization is the dominant
goal of the firm, in terms of economic profit (EVA), the reason
behind that ethical standard because they are the agents of
shareholders and self-interests of managers.
Mangers: some believe that the dominant business goal is
the management welfare maximization, because they are
interested in their own welfare. In the perfect competition,
managers maximize wealth just to survive. They have
several conflict with the share holders, they are interested in
size over profitability. The risk attitude, agency problem.
Creditors: in general the creditors’ protection increase
when wealth increases. But some exceptions could be
considered, especially with risk associated with the
investment, so we have to consider the interest of both
shareholders and creditors.
Customers, employees, and suppliers: it is in the interest
of owners to benefit other groups such as customers and
employees, (best better products and compensation
package, and good relations with suppliers in order to
get high quality of inputs).
Society: investment to improve efficiency means reducing
the cost of the firm product and realize an increase in the
wages of employees. in the