Even though business is full of checks and balances, the business world doesn’t exist in a vacuum and business decisions are still made by humans.For Capitalism to succeed, Japanese Translation managers must look past recent scandals like Enron, GE, and the current Financial Crisis and continue to believe that most business decisions are made to strengthen the value of a corporation’s stock. While stock price should be weighted most importantly, and there are often other factors that play into how business decisions are made. For instance, a corporate leader might consider how his actions will influence his own wellbeing, the wellbeing of fellow workers and perhaps society in general. While a manager may consider a variety of factors when making a decision, stock price maximization must be weighted most important. By definition of the corporate structure of business, Arabic Document Translation stockholders own the firm and exercise the power to nominate and elect the management board. In return for being voted to lead a corporation, the management team must follow through on the demands of stockholders..

But while the responsibility of the management team seems clearly defined, often different groups of stockholders emerge that have different objectives. This being the case, might not managers pursue goals other than stock price maximization? For example, some have argued that the managers of a large, well-entrenched corporation could work just hard enough to keep stockholder returns at a reasonable level and then devote the remainder of their efforts and resources to public service activities, to employee benefits, to higher executive salaries, or to golf.

It is almost impossible to determine whether a particular management team is trying to maximize shareholder wealth or is merely attempting to keep stockholders satisfied while pursuing other goals. Further, how would a Russian Language 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? Regardless, in a competitive free market economy most managers will act in a way that is in the best interests of stockholders or they will be replaced by employees with better intentions. 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 the purchase by one company of the stock of another over the opposition of its management, whereas a proxy fight involves an attempt to gain control by getting stockholders to vote a new management group into place. Hostile takeovers usually occur when the stock price is considered low. As a result, the management team will try to make the stock expensive or unattractive to potential buyers.

While on the topic of managerial decision-making in a corporate environment, one should also consider the importance of social contribution. The question often arises as to whether businesses should operate in ways that only serve the needs or stockholders or if they should also seek to opportunities to give back to their employees, customers and community.

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. Obviously, if some firms engage in such socially responsible behavior while others do not then there is a possibility that some companies will be at a competitive disadvantage.