SHAREHOLDER The central objective of the firm and its managers is making optimal tradeoffs and that of value maximization‚ i.e. maximizing total market value of the firm. There are two theories proposed to achieve the firm’s objective which are the ‘Stakeholder Theory’ and ‘Shareholder Theory’. “Stakeholder Theory” assumes that values are necessarily and explicitly a part of doing business and the manager needs to take into account the interest of all the stakeholders while taking decisions on the
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progress in a lethargic & unprepared manner. b. Law of Exercise The second law of learning is the ‘Law of Exercise’‚ which means that drill or practice helps in increasing efficiency and durability of learning and according to Throndike’s S-R Bond Theory‚ the connections are strengthened with trail or practice and the connections are weakened when trial or practice is discontinued. The ‘law of exercise’‚ therefore‚ is also understood as the ‘law of use and disuse’ in which case connections or bonds
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society. Equity theory is social justice theory‚ designed by Adams in 1963. It claims that individuals review the inputs and outcomes of themselves and others‚ and in situations of inequity‚ experience greater cognitive dissonance than individuals in equitable situations. This kind of equity is perceived as social justice in society (or company‚ or any other environment that involves individuals). Equity theory draws from exchange‚ dissonance‚ and social comparison theories in making predictions
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disparate system of rewards." Social exchange theory is a social psychological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that all human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. For example‚ when a person perceives the costs of relationship as outweighing the perceived benefits‚ then the theory predicts that the person will choose to leave
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Transition demographic theory In the middle of the twentieth century‚ demographic transition theory became the dominant theory of population growth. Based on observed trends in Western European societies‚ it argues that populations go through three stages in their transition to a modern pattern. Stage one (pre transition) is characterized by low or no growth‚ and high fertility is counterbalanced by high mortality. In Stage Two (the stage of transition)‚ mortality rates begin to decline‚ and
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This paper introduces Rational System Perspectives in relations to four promin ent schools of organization theory; which are Taylor’s scientific management‚ Fayol’s general principles of management‚ Weber’s theory of bureaucracy and Simon’s discussion on administrative behavior. Rational System Perspectives There are two key elements characterizing rational systems: 1) Goal Specificity Specific goals support rational behavior in organizations by providing guideli nes on structural design
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in many organization systems. The different uses of this word is dependent on the systems being chartered and organized. Nowadays‚ complexity theory is at the center of what systems are today and it is attached with the concept that a system is more than a set of machines. Regarding complexity theory‚ Margarita Mayoral (2012) stated that “Complexity theory enables the identification‚ characterization‚ and comparison of the structure and dynamics of many types of natural and artificial systems‚ and
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Leadership Theories: Opposites and equals Danielle McNaught MGMT500 PS1- Organizational Behavior & Human Resource Management Dr. Marci Johnson Southwestern College Professional Studies Abstract This paper evaluates theories of leadership and summarizes the findings from the research. Leadership versus management‚ leader traits‚ skills‚ behavior‚ and activities can be antiquated differently with the different leadership styles. Leadership power‚ influence‚ situations‚ situational moderator
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Contingency theory is a class of behavioral theory that claims that there is no best way to organize a corporation‚ to lead a company‚ or to make decisions. Instead‚ the optimal course of action is contingent (dependent) upon the internal and external situation. A contingent leader effectively applies their own style of leadership to the right situation. In contingency theory of leadership‚ the success of the leader is a function of various contingencies in the form of subordinate‚ task‚ and/or
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Phenomological theory is defined as‚ “a new version of symbolic interactionism. Determined or caused by various forces in the environment‚ and how deviant view their own deviant experiences” (Thio‚ 2013). This theory is when those that are acting in a deviant way do not believe that their own actions are deviant. The theory also identifies that those that are acting in a deviant way do so to accomplish trust‚ relationships‚ and fulfillment of needs being meet through the displayed behavior. This
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