Abstract
The question whether the maximization of shareholder value is the criterion for the working of a firm has become one of the major topics of the discussion in economic science. In July 1998, the German president, Roman Herzog, contended that “it is not acceptable that the price of the shares of a firm rises with the number of employees laid off”1, and admonished German business firms thereby not to maximize the shareholder value only but to look at the purpose of the firm in a broader perspective. On the other hand, there is the Neo-classical theory of the firm contending that the firm works best when it fulfils the task of maximizing the shareholder value only. According to the financial theory of the firm, the firm is a union of investments the return on which it must maximize.
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