My Paper

I believe that the company’s primary goal is to maximize stockholder wealth. This also means maximizing the value of the stock. Companies often award stock options and bonuses on the basis of organization performance, thus linking organization's personal wealth with the company's financial performance. To say that a company’s primary goal should be to maximize the wealth for its stockholders is one of several responsibilities that should be considered when considering the sustainability of a company. I believe a publicly traded company should focus on its employees, its shareholders, as well as it customers – all are very important to the overall longevity and success of a company. The employees keep the company running and share a common interest in supporting the company’s mission while achieving the company’s goals and objectives. The company could not exist or function without employees. Its shareholders are equally important; they in essence own a portion of the company. In order to be a vital, sustainable company in these tough economic times, one must demonstrate the potential for positive earnings and dividends to keep its shareholders pleased. Lastly, customers are just as important as the employees; they provide money to the company and help steer the supply and demand.

Many individuals argue that executive compensation has gotten out of control but there is no perfect way to determine how “fair” things should be, but we can compare company’s stock prices and see if the executives with the most pay are leading their companies to above average returns.

I believe that a firm’s managers, employees, customers, suppliers and citizens would all agree that management should focus primarily if not solely on wealth maximization. One would have to ask the question, “What’s in it for me”. The firm’s manager’s ability to generate cash flow now and in the future would the determining factor for all.

The goals of a manager should focus on generating cash flow,...