Stakeholder Capitalism vs. Shareholder Capitalism

These flashcards cover the key concepts and vocabulary related to the debate between stakeholder capitalism and shareholder capitalism, as outlined in the lecture notes.

Shareholder Capitalism

An economic system where the primary goal of a corporation is to maximize profits for its shareholders.

Stakeholder Capitalism

A corporate governance model that extends a corporation's responsibilities to a broader group including employees, customers, suppliers, and the community.

ESG

An acronym for Environmental, Social, and Governance criteria used to evaluate corporate behavior and sustainability.

Agency Theory

A theory that explains the relationship between principals (shareholders) and agents (managers), often focused on aligning the interests of both parties.

Friedman Doctrine

A principle articulated by Milton Friedman asserting that the sole responsibility of business is to increase its profits while adhering to the rules of the game.

B-Corporation

A certification for companies that meet high standards of social and environmental performance, accountability, and transparency.

Greenwashing

A practice where companies exaggerate or falsely advertise their environmental practices to appear more environmentally friendly.

Co-determination

A German corporate governance model that allows employees to have a say in company decisions through representation on boards.

Socially Responsible Investment (SRI)

Investment strategies that consider both financial return and social/environmental good, often aligned with ESG principles.

Stakeholder Theory

A theory that argues businesses have responsibilities to all their stakeholders, not just shareholders.