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Course paper with 1,000 words on shareholder equity
Typology: Essays (high school)
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Business maximizing profit and shareholder equity Kelly Corey Busi1200 601 When it comes to businesses they are often seen as entities that exist solely only to maximize their profit and shareholder equity. This perspective would be rooted in the belief that the primary goal is for any business to generate financial returns for its owners and investors. While the focus on profitability is essential for the success and sustainability of a business, it also raises important questions about the ethical considerations involved in profit maximization. One of my key arguments in favor of businesses prioritizing profit is that it would allow them to grow, innovate, and then create value for their stakeholders. More profitable businesses can reinvest their earnings into the research and development, expansion, and employee training that goes along with this. This would ultimately lead to increased productivity and competitiveness. With this being said the profits can be distributed to the shareholders in the form of dividends or used to attract new investors, which would ensure the continued financial support for the business in need. However, with that being said the pursuit of profit can sometimes come with a cost. Ethical considerations may also be overlooked in favor of the short-term financial goals and not the long-term goals. This could lead to decisions that would harm the employees, the customers, and the society as a whole. This would raise questions that are important like the responsibilities that the business has towards their employees and the society at large. By looking at both the ethical implications and impact on employees and society of prioritizing profit maximization, the business would be able to gain a better understanding of the complex role that the business would play in the current economy. Ethical considerations have been proven to play a very crucial role in any business's process of profit gaining within the business. When any business prioritizes profit without looking after the well-being of their employees this can very much lead to negative consequences for that business. This can look at low wages, poor working conditions, and also a lack of job security along the way. This would not only harm the people working for the business but in the end harm the business and community as a whole. Employees who are not treated the correct way will experience lower levels of job satisfaction and much higher turnover rates within that business. It will also show a decrease in the productivity among the business. This will create a cycle of instability within the workforce, and affect the business as a whole. This will contribute to social inequality and perpetuate systemic issues within the society of the business and the community.
Getting down to the root of things the impact of profit maximization on society extends beyond just employee treatment. The business has the responsibility to consider how their actions would affect the community in which the business operates. Ignoring the ethical considerations in favor of short-term financial gains can lead to environmental degradation, social unrest, and economic instability within these communities. By working on the ethical considerations in profit maximization, the business can help with creating a positive impact on both the employees of the business and the community. This would include treating the employees in a good favor, providing safe working conditions, and then considering the broader societal implications of their actions. When the business shows that they are prioritizing ethics along the side of profitability they are more likely to build that trust within the stakeholder and in return contribute positively to society. The argument lies that businesses exist solely to maximize profit and shareholder equity is a complex and multifaceted issue that raises important ethical considerations. It is all around equally important that the business prioritize ethical considerations in its pursuit of financial gains. The ethical considerations in profit maximization would play a critical role when it comes to ensuring that the business operates in a fair, transparent, and responsible manner. Treating the employees ethically by providing fair wages, and a safe working environment. This would not only provide the benefits to the individuals directly but in return contribute to higher levels of satisfaction and loyalty in the workforce among the business. Also considering the broader impact of profit maximization on society can help in the long run prevent negative consequences such as environmental degradation and societal inequality. When prioritizing the ethical considerations alongside the profitability, the business can build up the trust that they need with their stakeholders and in return contribute positivity to the community as a whole along the way. Ultimately, businesses that can operate ethically are more likely to create a sustainable impact on both the employees and community while also in fact achieving long-term financial success. Looking at a few businesses that treat their employees the correct way and also gain the correct amount of profit would be like Chick-fil-A, this business goes beyond everything to make sure their employees are treated the correct way with proper training. They have a high level of profit by doing all the things the correct way. They use the same training as Walt Disney World does with their employees. This is a great training platform to run a successful business all the way around and make a better community. Some businesses just have the right way of doing business, and then some just don’t care, and all they see if the profit. In the end, this can bite them in the butt.