Question

why the goals of a business manager are different from goals of investor

Answer 1

A stockholder or an investor is the partial owner of the company whereas the business or financial managers are like an agency of the company. They act on behalf of the company but are not the owners of the company.

Goal of a business manager is to keep a healthy and good relationship with the shareholders. Business managers also indulges in coordinating activities within the organization and effectively communicating important announcements with the shareholders.

Shareholders resort to cost reduction and cost cutting and always stresses to this fact wheras the business managers seeks other alternatives to increase productivity.A financial or business manager goes for Plan A, B, C with different costing bracket to choose the most suitable alternatives for the company.

Investors primarily look out for the short span benefits for their motto of buying and selling of stocks in the highly speculative market whereas the business manager has to look after both long term and short term profitability factors for the company.

Investors doesn't bother about the employee living conditions or personal problems as such whereas the managers having a long span relationship with the shareholders are very much involved with the employee problems.

Thus above discussed are some of the basic reasons why the goals of a business managers differs from that of an investor's goals.