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Essays on Should the Primary Objective of Management Be to Increase the Wealth of Shareholders and Owners Report

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The paper "Should the Primary Objective of Management Be to Increase the Wealth of Shareholders and Owners" is a great example of a report on management. The debate over the role of business enterprises in the world today has changed course lately. The new theory seeks to change the notion that the role of enterprise is only to cater to the interests of the shareholders only. Many business leaders are currently putting the aspect of corporate social responsibility into considerations. This paper covers a number of arguments on the primary objective of the management of a business.

The essay progressively compares this argument with Milton Friedman's thesis. The objective of this study is to provide a comprehensive insight into the obligations of business enterprises. Most importantly at the end of the study, there is a conclusion that justifies the primary roles of the management of any company. Thesis statement The primary objective of management incorporates increasing the wealth of shareholders as well as meeting the expectations of society. Business in a new perspective It is pertinent to note that a misinterpretation of the more than four decades old theory concerning the purpose of business has led to several things.

The theory suggested by Milton (1970) insisted on the sole purpose of business being to make profits for the organization. However, this theory has been used to justify organizational management to engage in many unethical activities. These activities are geared towards achieving the interest of the shareholders at the detriment of society. However, compassion should help business leaders to strike a balance between social needs and making profits for the organization. Compassion is considered the theory of basing organizations' profits to the impact it has on the community (Van Beurden & Gossling, 2008). Some organizations around the world considered compassionate include the ford motor company, PepsiCo, Aeropostale inclusive as well as Target.

This is cording to an article authored by bijou (2011). This concept of compassion has been in existence for as long as humanity. However, its adoption into the business world has been noticeable in the past few decades.  

References

Ahlstrom, D (2010). Innovation and Growth: How Business Contributes to Society. Academy of Management, August, pp 11-24.

Bejou, D. (2011). Compassion as the New Philosophy of Business. Journal of Relationship Marketing, issue 10, pp 1-6

Cosans, C (2009). Does Milton Friedman Support a Vigorous Business Ethics? Journal of Business Ethics, issue 87, pp 391-399

Friedman, M. (1970). Capitalism and freedom. Chicago: University of Chicago Press.

Husted, BW & de Jesus Salazar, J (2006). Taking Friedman Seriously: Maximising Profits and Social Performance. Journal of Management Studies, vol. 43(1): 76-91.

Kotler, P., & Lee, N. (2005). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. Hoboken, NJ: Wiley

May, S., Cheney, G., & Roper, J. (2007). The debate over corporate social responsibility. Oxford: Oxford University Press

Shaw, W (2009). Marxism, Business Ethics, and Corporate Social Responsibility. Journal of Business Ethics, vol. 86: 565-576

Smith, C. N (2003). Corporate Social Responsibility: Whether or How? California Management Review, vol. 45(4): 52-76

Van Beurden, P & Gossling, T (2008). The Worth of Values – A Literature Review on the Relation between Corporate Social and Financial Performance. Journal of Business Ethics, vol. 82: 407-424

Wilcke, RW (2004). An Appropriate Ethical Model for Business and a Critique of Milton Friedman’s Thesis. The Independent Review, volume IX (2): 187-209

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