Management Essay Example | Topics and Well Written Essays - 2750 words

Management - Essay Example Since then, the debate has been on in favour and against of the thought and more particularly to find the right balance where profits really benefit the society. Counter extreme to the argument was the concept of Corporate Social Responsibility which stated that businesses are required to respond to societal needs in other forms as well than just earning profit to maximise employment. Businesses have to some extend accept this counter thought with further extension in idea regarding maximising shareholder and owner’s wealth and many other sub ideas. However, the finding of the real right balance between the corners is yet being debated as no measure has yet been developed to perfect solution. PRIMARY OBJECTIVE OF MANAGEMENT- THEORATICAL REFERENCES AND THEIR ANALYSIS To state in one sentence primary objective of the business is to benefit society, at the same time remember the fact that owners and shareholders are also part of society and hence, not at the cost of the sharehold ers’ benefit. The debate shall focus more on the fact that how and to what this benefit extends shall be translated. Exploring the basic idea of Friedman who stated that the aim of business is to achieve maximum profits within boundaries of law and this is how society is benefitted, one finds this idea satisfactory unless there comes any law that does not support societal interest or even more questioning does there exist any law that goes against the interest of society? All the laws are made in larger interest of society and with this it can stressed that Friedman’s thought had no flaw. However, most of the literature questioned the profit maximisation part with taking it to the point that contrast to the societal concern and scope of debate enlarged in direction of benefit of firm or society as whole and how it should be transferred. Considering this school of thought, more appropriate and concrete thought requires it be benefit or wealth of all stakeholders, where stakeholders include every person who is directly or indirectly connected with organisation. This stance has no flaw as the basic idea constrains to remain operational within. (Stakeholder Analysis) To support the argument, consider the example of Marks and Spencer. UK retail giant with global existence recent matter charging higher price to its women lingerie product stating the reason of higher cost and then higher tax was highly negated on social media website where more than 14000 people joined the cause for protest. The protest ultimately forced the giant to bow down accept the decision as their mistake while taking back decision, giving excess discounts to all customer of that product class as well as apologies to the society. To extract from this example is the fact that if it the said argument would have been true in place then M&S’s decision should have been appreciated as the giant only aimed to cover the excess cost incurred on the product, that would have added to its profitability , though in its respective share only. While, people who protested just joined the cause for bias attitude towards certain people and of course not all were affected by the decision. Hence, what needs be made the basis of maximisation is the stakeholders’ wealth that is always in position to affect the position of firm (Bejou, 2011). From the given image, it can also be concluded that stakeholders lie in levels. Firm