To whom are corporate managers morally responsible and in what respects? Is their social responsibility to maximize returns to investors? Why/why not? Under what circumstances and subject to what...

To whom are corporate managers morally responsible and in what respects? Is their social
responsibility to maximize returns to investors? Why/why not? Under what circumstances and
subject to what conditions?
Introduction
In consideration of the specific role and moral responsibility of corporate managers, there exist
diversified views of the different authors and researchers. As one of the group is of the opinion
that the corporate managers have prime obligations towards the stockholders, i.e. to maximize
the profit for the stakeholders, and has minimal moral, contractual and legal obligations towards
the stakeholders like customers, vendors, and employees. In the similar manner certain group of
other authors and researchers are in favor of stakeholder theory, which states that the corporate
managers are liable to optimize and keep balance in the legitimate interest of both shareholders
and stakeholders simultaneously.
Considering such two diversified views it always remains the matter of consideration that
a corporate manager or executive is liable towards whom, is its liability is concentrated towards
the stockholders or it is equality directed towards the all available stakeholders of the company
including customers, suppliers, government and employees, etc. . This state of confusion causes
a state of moral dilemma for the corporate mangers where his role and obligations dwells
between the characteristic definition and respective scenario, where the scope of fulfillment of
obligations depends upon the prioritization of the specific approach and its implementation in the
given scenario of business operation.
Based on that specific scenario of the business operation it can be derived correctly and
comprehensively that what is the scope of social responsibility of the business manager, that is it
limited to the maximization of profit for the investors or stockholders or it will also consider the
other stakeholders too in the consideration. In order to develop comprehensive understanding
about the relative dependency of corporate managers on both perspectives of organizational
management and determination of the respective scope of the both approaches, an analytical
presentation of the facts and respective legislative norms has been presented in the paper. It also
directs the efforts to explore the respective situations and conditions under the influence of which
the respective adoption of the approach has been made and it also has been decided that the
specific organizational management approach will be proved to be the appropriate fit as per the
situation of the organization’s operational scenarios.
Manager’s Moral Responsibility and their Influence
A corporate manager has a specific role to integrate the all available resources in a
systematic manner and assure that the resources are optimally utilized in the best interest of the
organizational obligation fulfillment. As per the respective opinion of different authors, the basic
approach of defining the scope of the obligation for the corporate managers and executives has
been segregated in two specific theories, i.e., firstly the stockholder theory and secondly the
stakeholder theory. Both these theories define the scope of the obligation and respective
responsibility of the corporate managers towards the stockholders and stakeholders of the
organization. Brief details of the both the theories can be presented as below:
Stockholder Theory: As per this theory it has been propounded that the executives or corporate
managers are expected to work for the benefit of stockholders and always remain responsible
towards them. This theory suggests that the prime objective of the executives and corporate
managers is to maximize the profit or revenue generation potential of the organization with a
minimal focus on complying with legal and contractual obligations and little consideration to the
moral obligations of the other stakeholders like employees, customers, suppliers, government
and others.
Stakeholder Theory: Stakeholder theory is the extended part of the shareholders theory, which
postulates the equal consideration to both stockholders and stakeholders of interest in the
organization. As per theory it has been propounded that the prime obligation or responsibility of
the executives and corporate managers are to keep the balance in the mutual interest of the
stockholders and stakeholders and advances these interests with that of the success and growth of
the organization. Thus this theory propounds that the moral obligation and respective
responsibility of the executives or corporate managers are not only limited to that of the
stockholders but equally considers the stakeholder’s interest in active achievement of
organizational objectives.
On the basis of the above mentioned discussion about the two theories there exists a clear
distinction in the approach of the management of the organization and active achievement and
scope of the organizational objective. From the first perspective of management it has been
propounded that the prime objective of the executives or corporate managers are to optimize the
profit potential of the organization and all efforts should be integrated and aligned to achieve the
same. Nominal focus is intended to consider the legal, contractual and moral obligation
accomplishment related to the stakeholders part. In consideration to that fallacy of the initial
approach of organizational management several authors and researchers has propounded that
stakeholder theory which stimulate the active and balanced consideration to each stakeholder's
interest so that revenue can be optimized with equalized benefits of all the stockholders and
stakeholders, like customers, employees and suppliers.
In order to affirm the relevance of both the theories, efforts have been made to analyze its
suitability in different situations or scenarios. To achieve the same different normative, positive,
strategic and legal approaches has been derived and discussed to access the validity of each in
respective scenarios. As per the Normative Stockholder Theory it has been conveyed that the
executive’s or corporate manger’s priorities are defined towards making money for the
shareholders, either through profits or return on equity. It has been affirmed that it is their moral
obligation and they are expected to do so, with...