ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations
Under stakeholder theory, which of the following is the most appropriate way to view a company's employees?
Under stakeholder theory, employees are a stakeholder group with legitimate interests that management should consider when making decisions. They are not merely a cost to minimise, and an employment contract does not make them owners of the company.
- AAs a cost to be minimised so that shareholder returns are maximised
- BAs a stakeholder group with legitimate interests that management should consider in decisionsCorrect
- CAs owners of the company by virtue of their employment contract
Explanation
Stakeholder theory regards employees as an internal stakeholder group whose interests deserve consideration. Viewing them purely as a cost fits a narrow shareholder view, and employment does not make them owners.
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