Maximize shareholders wealth by maximizing value of stock

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Reference no: EM131957381

We have learnt that the financial manager's or the firm's goal should be to maximize shareholders' wealth by maximizing the value of the stock. However, does this goal conflict with other goals, such as avoiding unethical or illegal behavior? In particular, do you think subjects such as customer and employee safety, the environment, and the general good of society fit in this framework, or are they essentially ignored?

For example, think about the environmental regulation violations by Volkswagen, and more recently by Fiat Chrysler. Why do you think the managers and employees did something that was definitely illegal? Was the goal of "stock value maximization" their motivation? Did their actions help to boost the company's stock? In the short run? In the long run? How did a ruined reputation affect the company's stock value? Read more about it here:

Reference no: EM131957381

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