CIMA BA4 · Chapter 8 · Question 8 of 10
Which stakeholder theory approach holds that managers should consider stakeholder interests because doing so will ultimately improve long-term financial performance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The instrumental view
Explanation
The instrumental view of stakeholder theory treats attention to stakeholders as a means to an end: satisfying stakeholders improves long-term profitability. The normative view holds that stakeholders have intrinsic moral claims regardless of financial benefit. Shareholder primacy rejects broader stakeholder duties.
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