Question

The first sentence of the “The Dignity and the Rights of Workers” documents states:

“The economy must serve the people, not the other way around.”

Secondly, within “The Common Good” document, please note the highlighted section that states:

“(74) Catholic Social Teaching recognizes the fundamental and positive value of business, the market, private property and free human creativity in the economic sector. But sometimes market forces cannot deliver what the common good demands…”

With this as a context, please read the following statement and state whether you agree or disagree and then provide your reasoning/defense for reaching this conclusion. Please consider this statement in light of their less expensive product line (i.e., Night-Train, Wild Irish Rose, Thunderbird)

“EJ Gallo is an ethical public company whose goal is to maximize shareholder value. The strategies employed by senior management exemplifies keen marketing insight and delivers on their mission.”

Answer 1

The highlighted part explains dilemma betweenplanned and market economies. What and how to produce in an economy is often a debatable isue. Market economies answer it through invisible hand and planned economies answer this through planning by experts.

Market forces may not provide public goods and may also underproduce merit goods like education and health which contributes to social capital.

I agree with EJ Gallo business objective of shareholder value maximization. Shareholders are true owners and will get more dividends if company has more profits. This may, however lead to more profit orientedness,cost cutting measures through less wages or. higher pricing.

There is nothing wrong in aiming at profits. Today, entryand exit are becoming easier as big corportaes. often enterin profitable businesses. This leads to competition and more choices for consumers. This also ensures business viability and consumer centric products. Hence marketing, customer feedback is essential and company. always have to be focussed more.