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Running head: SHAREHOLDERS AND MANAGERIAL DECISIONS 1
Shareholders and Managerial Decisions
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SHAREHOLDERS AND MANAGERIAL DECISIONS 2
Introduction
It is longstanding debate whether a company should involve their major shareholders in the
managerial decision-making process or not. Different companies have different perspectives
on this issue. However, shareholders are like a catalyst which provide the growth and
expansion to a company. Most of the companies realize their importance in the business
scenario and involve them in their decision-making process, but it largely depends from
company to company as to how much they leverage them in the decision-making process.
Apple Background
In 1976, Steve Jobs and Steven Wozniak decided to market their machine named Apple I
which was designed by Wozniak. They introduced their machine Apple II at local trade
shows in 1977 and people gave their attention to it. It was an improvement to their earlier
machine; an impressive machine that was in a plastic case and had color graphics. The
invention of inexpensive Apple II (floppy disk) marked a great event in the history of Apple
Inc. and the sales of the company saw a drastic increment which kept on increasing ever
since. In 1980, the company released Apple III and started selling abroad with several
thousand employees on board (Architosh, 2002). In January, 1984, Apple introduced
Macintosh to the market and capitalized heavily upon the same until the customers were fed
up with lack of the hard drive connectivity and small size of RAM. In return, Microsoft
agreed that it will produce a Macintosh version of its Office 1998 suit which was highly
successful. Realizing the power of distribution and online marketing, Jobs decided to open
Apple Store. It turned out to be a very fruitful venture event from the very outset. It was quite
lucrative and Apple saw consecutive growth in the forthcoming quarters (Sellers, D., 2001).
Shareholders’ Impact on Decision Making
Generally shareholders play a very significant roles in decision making process of a
company. However, it largely vary from company to company. There are companies who
SHAREHOLDERS AND MANAGERIAL DECISIONS 3
place too much emphasis on the major shareholders in their decision-making process. They
rely on them for any strategic major decisions. A meeting is held with the major shareholders
and the proposal is explained to them. Thereafter, they are asked as what they think about a
particular plan or should the company move ahead with this or not, or what alternatives are
there. Every shareholder gives his/her opinion and on the basis of that the decision is taken.
On the other hand, there are companies that hardly rely on shareholders in their decision-
making process. They do not value too much what...