Question

Profit Maximization. The primary goal of most businesses is profit
maximization. Discuss the concept of profit maximization. How can it be
reconciled with corporate social responsibility? Can profit maximization promote
social welfare?

Answer 1

Profit maximisation is a narrow concept that merely focusses on the profits of the company and does not concentrate on wealth maximisation. The managers of the company should focus on wealth maximisation and creating value for the shareholders. Corporate social responsibility is an obligation of the company towards the society. A company can be socially responsible by implementing fair practices and promote employee and society welfare, take measures to reduce pollution and organise camps to protect the hungry and needy. Hence, the role of CRS is to reconcile the difference between organisation main objective of profit maximisation vs the enhancement of the welfare of the needy, growth of the economic sector and sustainable social development.

No, profit maximisation cannot promote social welfare,

The companies that focus on profits are just profit minded and they only undertake activities that lead to profit maximisation. the real responsibility of corporation is to deviate from profits and focus on the betterment of the society as a whole.