In the Separation Perspective, what role do managers play?

In the Separation Perspective, managers are viewed as agents for the firm's owners, typically the shareholders. This concept is rooted in agency theory, which posits that there is a separation between ownership and control within a corporation. Shareholders, who are the owners, delegate the day-to-day management and decision-making authority to managers. As agents, managers are responsible for making decisions that align with the interests of the owners while maximizing shareholder value.

This relationship emphasizes the importance of trust, accountability, and the responsibilities that managers have in serving the best interests of the shareholders. The effectiveness of this relationship can be influenced by various mechanisms, such as performance-based incentives and monitoring systems, ensuring that managers act in the best interest of the owners rather than pursuing their personal agendas.

The other options reflect different roles and responsibilities that might exist in a corporate structure but do not accurately capture the essence of the Separation Perspective. For instance, while managers might advise the board of directors or mediate between employees and owners, these roles are not central to the agency relationship inherent in the Separation Perspective. Similarly, the idea of being decision-makers for stakeholders implies a broader, more inclusive responsibility that extends beyond the core focus on serving the interests of the owners.