Bachelor of General Studies (BGS) Degree Practice Exam

What is a key benefit of stakeholder theory for employees?

1. Higher stock prices.

2. Better working conditions.

3. Increased job security.

4. Professional growth opportunities.

The correct answer is: Professional growth opportunities.

The key benefit of stakeholder theory for employees lies in the focus on valuing all stakeholders, including employees, in the decision-making processes of an organization. This theory advocates for creating a balance between the interests of various stakeholders—such as customers, suppliers, employees, and the community. When an organization applies stakeholder theory effectively, it promotes a culture that prioritizes the well-being and development of its employees. This often translates into professional growth opportunities, as the organization invests in training, mentorship, and career advancement programs. By supporting employees’ development, organizations foster an environment where individuals can enhance their skills and advance their careers, leading to greater job satisfaction and increased motivation. While options like higher stock prices, better working conditions, and increased job security are important and can be influenced by stakeholder theory, they do not encapsulate its core benefit for employees as directly as professional growth opportunities do. Higher stock prices might benefit shareholders but do not guarantee an enhancement in employee roles. Similarly, better working conditions and job security can result from broader stakeholder considerations, but the most direct link to the focus on employee development is the opportunity for professional growth.