Question

_disadvantages: firm has to be reponsible to other stakeholders

_ Disadvantage of agency conflict

Answer 1

  Firm has to be responsible to other stakeholders

Then shareholders vs. stakeholders

There has been a lot of debate on the shareholders vs. stakeholders and on who of the two set of people be given more importance. Let us first have a look at the major differentiating factors between shareholders and stakeholders

Stakeholders are individuals who are affected by a project or who have some sort of influence over the project. Stakeholders have a vested interest in how the project turns out, whether it fails or succeeds. Potential stakeholders include both internal people who work for your company and external stakeholders, such as lenders, suppliers and customers. Stakeholders have some disadvantages that you are sometimes able to control.

Proper implementation of corporate social responsibility initiatives might require a company to makeshift in their working model, and this might turn out as an impediment to a business to operate.

Disadvantages: _agency conflict

It is important to consider these advantages and disadvantages before agreeing to arbitration, or any other kind of alternative dispute resolution. Chances are, you have already agreed to arbitration in many situations, without even knowing it. Many lease agreements and employment contracts have mandatory arbitration provisions, and they will usually be enforced, as long as certain standards are met (generally, they must not deprive a person of a constitutional right, and they should be reciprocal).