UGC NET
   Top Resources
profile-img
Eduncle posted an MCQ
October 16, 2019 • 23:59 pm 0 points
  • UGC NET
  • Management

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the code given below. Assertion (A) : The stakeholder model can be used as a tool for managers, who are asked to handle the stakeholders relations as a guide to achieve ultimate goals. Reason (R) : Corporation is an economic institution which has a social service as well as a profit making function while shareholder control is similar to Adam Smith's 'invisible hand' argument.

Choose Your Answer:
0 Attempts Submit Now
  • 0 Likes
  • 1 Comments
  • 0 Shares
  • comment-profile-img>
    Eduncle Best Answer

    Stakeholder model is used by the manager to handle the stakeholders relation.
    Stakeholder Model : The stakeholder model is descriptive - it provides a language and concepts to describe corporations, the way they work and their impacts on the wider environment. Stakeholder Theory is useful in helping to understand, and manage organizations, which is why the language of stakeholder theory is used widely in business, not for profit, government etc.
    The stakeholder model is instrumental, in that managing stakeholders should result in the achievement of business goals: increased profitability, growth, sustainability. The stakeholder model also allows for the testing of the connections between managing stakeholders and reaching business targets.
    The third aspect of the stakeholder model is the presumption that stakeholders have inherent value. As Donaldson and Preston explain stakeholder theory accepts that stakeholders have legitimate stakes in corporate activity based on their interest in the corporation and that stakeholders have intrinsic value.
    Firm that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners. Corporations are owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations, and have three distinct characteristics (1) Legal existence: a firm can (like a person) buy, sell, own, enter into a contract, and sue other persons and firms, and be sued by them. It can do good and be rewarded, and can commit offence and be punished. (2) Limited liability: a firm and its owners are limited in their liability to the creditors and other obligors only up to the resources of the firm, unless the owners give personal-guaranties.
    Both (A) & (R) are correct and (R) is the right explanation of (A).

whatsapp-btn

Do You Want Better RANK in Your Exam?

Start Your Preparations with Eduncle’s FREE Study Material

  • Updated Syllabus, Paper Pattern & Full Exam Details
  • Sample Theory of Most Important Topic
  • Model Test Paper with Detailed Solutions
  • Last 5 Years Question Papers & Answers

Sign Up to Download FREE Study Material Worth Rs. 500/-