CAPE MOB Unit 1 Practice Questions - CAPE Management Of Business Unit 1 Exam

Shareholder theory prioritizes the interests of all parties affected by the business, while stakeholder theory focuses strictly on maximizing profits for owners. Stakeholder theory asserts that a business has obligations to employees, customers, suppliers, and the community, whereas shareholder theory prioritizes maximizing wealth for the owners of the company. Stakeholder theory applies only to public sector organizations, whereas shareholder theory applies only to private sector corporations. Shareholder theory requires businesses to engage in corporate social responsibility, whereas stakeholder theory forbids it.