Question

In: Finance

I have heard the statement that "...the sole purpose of a business is to make a...

I have heard the statement that "...the sole purpose of a business is to make a profit" - do you believe that should be the goal of every company? I am not saying it is right or that it is wrong, I want to see what you can do with this assertion. As an investor, I may agree with this statement ... as a member of society I may not agree with this statement.

What are your thoughts on this assertion? Should the profits be the sole motivation of a company? Why or why not? Please explain your rationale.

Solutions

Expert Solution

Th primary objective of any business is to earn profit but a bisiness is a part of the society and hence it can not have an independent existance .No company can make profit without depending the society.

A business is whollly indebted to the society because it utilises the resources of the society whether cash or any other physical resources .Even labourers and emplyees belong to the society ..

From investors point ,he may think profit making must be the sole aim.But if he is ratinale investor ,he can not imagine that profit is the sole objective as evidenced from the above explanations.

In my opinion the survival of a business in the long term depending on how business develop attitudes towards the society.If it is positive,then such compnies do good for the society and never responsible to destroy the environment to which it is functioning.

To conclude ,let me say that only those business which are pro-active to the needs of the society can exist and earn profit in the long run.


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