The invasion of Ukraine has caused a list of companies to cease doing business in Russia.
Due to the Ukrainian invasion in March 2022 consumer giants including McDonald’s, Danone and Starbucks stopped all business operations in Russia. Shareholder theory states that the primary objective of a company is to maximize shareholder return. Russia’s decision to end operations there was driven by both economic forces and an analysis of risk that estimated the risks associated with continuing operations (Russia, 222). Stakeholder theory, on the other hand suggests that the company should consider the interests of all stakeholders. This could mean that Russia’s operations were halted to serve the needs of other stakeholders, such as customers or governments, which may have suffered from the Ukrainian invasion. The firm could view the move as an attempt to preserve its image by avoiding the political situation that has been causing controversy (Joel 2018, 2018). Stakeholder theory is a more convincing explanation of the decision by the company to stop doing business with Russia. Although shareholder theory concentrates on maximising shareholder returns, stakeholder theories considers multiple stakeholders. This includes those who were affected by the invasion in Ukraine. Additionally, Russia’s decision to cease operations could be seen by the company as a means to safeguard its reputation and keep positive relations with other stakeholders. According to stakeholder theory, Cont…
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
