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Accounting Replies Essay
Accounting Replies Assignment
Yes, I agree that shareholders do not always have adequate knowledge on how to run businesses. A person/company may want to diversify their portfolio by venturing into new fields that they are not accustomed (Gitman et al, 2015). I, for one, have bought stocks in some companies doing agriculture, biotechnology, and ICT, and do not have a background in the fields. However, I take such opportunities as a way of diversifying my interests and risk-taking so that I can learn new things and engage in better business practices. I have also worked in companies where the shareholders do not necessarily know the ins and outs of the business. However, I do not think that shareholders, such as venture capitalists, would be interested in investing in a startup or growing firm without adequate knowledge so that they can project whether and when they will receive a return on investment. The bottom line is that it is essential to know how to run/operate the business so that you can lower the risks and uncertainties of investments since that is one of the basic characteristics of a good investor.
I am always in favor of the phrase the business of a business is business since it should be the main goal of a profit-making organization. Even though people start businesses because they are interested in the field, have a talent, or possess unique ideas, they all want to break even and earn money to support their lifestyles and those of their descendants. Hence, a finance manager must ensure that creating value is the main guideline for their roles and responsibilities to keep the owners and shareholders happy (Hart & Zingales, 2017). However, as you mention, a shift has occurred over the years with regards to positive leadership approaches that cater to the needs of the workers, environment, and other shareholders. But, the organization should maintain the appropriate balance because there is no need of making the shareholders extremely happy at the expense of its financial health and that of the people who poured in the capital to start the enterprise in the first place...................GET A PLAGIARISM FREE COPY