The paper "Primary Objective of Managers" is a great example of a research proposal on management. In an ideal situation, the investor is more interested in making a good deal from any spending. This is because being in business and something that requires spending to achieve good results, the obligation real lies on the management to come up with appropriate business strategies and business ideas so as to ensure that the business is made more lucrative. With this regard, therefore, agree with the statement that, “ the primary objective of the management is to increase the wealth of the shareholders and the owners. ” However, this should not be the only objective.
This is because where the business operates, there are also other factors that can directly or indirectly have an influence on the performance of the business, and of which its management should be taken more seriously apart from embarking on wealth creation as the primary objective. These factors include employees, customers, and the general community in which the business operates. These factors according to Shaw (2009), can be summed together to mean corporate social responsibility (CSR) which means managing the business in such a way that it produces an overall positive impact on society.
The argument that “ the primary objective for the managers is to seek to maximize wealth for the shareholders and owners” is associated with Milton Friedman (1970). Even though Friedman went further to argue that this objective will be paramount as long as the business adheres to laws and ethical customs, this article will go further to argue what might have informed this assumption and what are the objectives that an organization must seek to achieve besides wealth maximization for the shareholders and owners. Purpose of the study The sole purpose of this article is therefore to present, a pro-argument which supports the argument that “ the primary objective of the managers should be to maximize wealth for the shareholders” and thereafter present various arguments that depict that wealth maximization is the primary objective but not the only objective by looking at how also the company should be working towards to impact positively to the community for sustainable growth and development.
This is to imply that irrespective of “ wealth maximization” being the primary objective, this can only be sustained if the company is paying attention to the community wellbeing by engaging in social activities that can positively change it.
Ahlstrom, D. (2010). ‘Innovation and Growth: How Business Contributes to Society’, Academy of Management, August, p. 11-24.
Cosans, C. (2009). ‘Does Milton Friedman Support a Vigorous Business Ethics?’ Journal of Business Ethics, issue 87, p. 391-399.
Maron, IY. (2006), ‘Toward a Unified Theory of the CSP–CFP Link’, Journal of Business Ethics 67(2), p.191–200.
Craig, N. (2003). ‘Corporate Social Responsibility: Whether or How?’ California Management Review, vol. 45, no. 4, summer, p. 52-76.
Crisp, R. (2008). Compassion and beyond. Ethic Theory and Moral Practice, 11, p. 233–246.
Ferrell, O., and Ferrell, L. (2008). Business Ethics: Ethical Decision Making and Cases, 7th Edition (Houghton Mifflin, Boston)
Husted, B., & de Jesus Salazar, J. (2006). ‘Taking Friedman Seriously: Maximising Profits and Social Performance’, Journal of Management Studies, 43:1, pp 76-91.
Peinado-Vara, E. (2006). ‘Corporate Social Responsibility in Latin America’, The Journal of Corporate Citizenship, 21(1), p. 61–69.
Shaw, W. (2009). ‘Marxism, Business Ethics, and Corporate Social Responsibility’, Journal of Business Ethics, 86, p. 565-576.
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, 82, p. 407-424.
Wilcke, R. (2004). ‘An Appropriate Ethical Model for Business and a Critique of Milton Friedman’s Thesis’, The Independent Review, volume IX, no. 2, Fall, p. 187-209.