Question

((2) According to Lynn Stout, what are some practices activist shareholders carry out in order to maximize their short-term gains? What are some practices put in place that prevent corporations from focusing only on short-term growth? Consider the case of Nortel or Electronic Arts. What could they do/have done to promote a more sustainable business model that would serve all stakeholders?

Answer 1

lynn stout is the author of 'the shareholder value myth'.share holder activism tells how share holder involved in the management of corporate company and uphold their right.according to lynn slout there are some practices involved to maximixe short term gain:1,share holders should have the right to take control over the management,decision making can also taken by them.2,increase mutual funds and pension funds can make buisness wider and acheive short term gains.3,the cult of share holder value can decrease the long term goals wished by the companies and inventions,this was taken by lynn from robert solowe and made an article in new york times.4.there are 40percentage of us companies are disappearing from 15 years,no company have full investment,many foreign investors are comming. these are the reasons mentioned by lynn stout,describing the increase in short term gain by share holders. HOW TO PREVENT CORPORATIONS FROM FOCUSING ON SHORT TERM GAINS: regulating foreign direct investment policies from government side,maximising domestic startups,regulating foreign trades .example :recently india put restriction on chinese companies to trade and invest in india,when only ministry of external affires guarantee permission, they can access buisness.this regulation can limit short term goals acheived by foreign companies. NORTEL SUSTAINABLE MANAGEMENT : 1,nortel green design research project environmental telephone,this programe indroduced by the canadian company since 1995.2,lead free interconnectional technologies.3,use of a non halogenated flame retardent for printed circuit boards.4,limitation of plastic in telephones.these are the methords implemented nortel technologies to inhance sustainable management