The Analysis of Shareholder Theory and Stakeholder Theory

In corporate governance theory, there are two kinds of arguments. One is a firm should focus on the shareholder wealth maximization, which is called theory of shareholder. Another one is a firm should focus on not only the interest of shareholders, but also employees, suppliers, local communities, which is called theory of stakeholder. This article will discuss these two arguments in four parts. The first part is an introduction of the two arguments. The second part is analysis of shareholder theory. The third part is analysis of stakeholder theory. The fourth part is a conclusion to express the author opinion.