Question

Societies attempt to keep private interests in line by legislating against behavior that might create social costs (such as polluting the water). If the legislation is comprehensive enough, does the problem of social costs cease to exist?Why or why not?

Answer 1

• Most management decisions have social consequences, and the question of how best to deal with these consequences is not easily answered ,an objective of maximizing firm or stockholder wealth implicity assumes that the social side costs are either trivial enough that they can be ignored or that they can be priced and charged to the firm, in many case , neither of these assumption is justifiable
• There are some cases where substantial social costs exit , and firms are aware of these costs, ethicists might argue that wealth maximization has to be sublimated to the border interest of society, but what about those cases where firms create substantial social costs without being aware of these costs .
• No if legislation comphresive comes into the force things not we cease because they are bureaucrat they have not time to look after the social costs because they have more other work relative to executive.