Shareholder Capitalism is the form of capitalism in which the interests of one stakeholder, the shareholder, dominate over all others. Companies operate with the sole purpose of maximizing profits and returning the highest possible dividends to shareholders.

Question

BlackTom AI · Accepted Answer

When evaluating statements about Shareholder Capitalism, we start by parsing what the claim is saying and what the standard definitions imply.
Option 1: True. The statement asserts that Shareholder Capitalism prioritizes shareholders above other stakeholders and focuses on maximizing profits and dividends for them. This aligns with the core description of shareholder primacy, which argues that the primary fiduciary duty of a corporation is to maximize returns to its shareholders. It reflects a view held by many proponents of this approach and is a common shorthand in discussions contrasting it with broader stakeholder approaches.
Option 2: False. This option would claim that the description is incorrect. However, while there is ongoing debate and critique about the sufficiency and ethics of prioritizing shareholders, the claim as written captures a widely recognized characterization of shareholder capitalism. Critics might argue that real-world practice also considers other interests, but that does not mean the statement is fundamentally false; it indicates that maximizing shareholder value is (at least historically and ideologically) central to this framework, even if imperfect in practice.
Option 3: True. (If you interpret the claim as a summative or essential description.) In many contexts, the phrase shareholder capitalism denotes a system where the dominant objective is to boost shareholder value, with dividends and stock price appreciation as primary metrics. This interpretation reinforces the alignment between the stated purpose and the described outcomes.
Option 4: False. (If you read it as an absolute universal rule that applies in every circumstance without exception.) It could be argued that practical implementations vary by jurisdiction, corporation, and time period, but the statement’s essence remains a common summary of the concept: there is a strong emphasis on shareholder interests within this framework, even though real-world practice may involve trade-offs with other stakeholders.
Note: Throughout this analysis, we consider both the definitional content of shareholder capitalism and the nuances that critics and practitioners highlight when discussing how it operates in practice, including tensions with employees, customers, communities, and long-term sustainability.

Section Merge: The Virtual Transformational Leadership Development (VTLD) Experience Lesson 12 Competency Quiz

Shareholder Capitalism is the form of capitalism in which the interests of one stakeholder, the shareholder, dominate over all others. Companies operate with the sole purpose of maximizing profits and returning the highest possible dividends to shareholders.

View Explanation

Log in for full answers

Similar Questions

Under Friedman’s logic, which of the following would not fail to violate shareholder primacy if and only if shareholder interests include non-financial goals which do not explicitly contradict profitability but also aren’t required for it?

Which of the following is not a reasonable way to define shareholder theory -- i.e., not a way that you could phrase the central claim made by the theory?

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler