"The desire of corporations to maximize profits creates conflict with the general welfare of the nation at large."
Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations or reading.
If possible, please provide some feedback by replying to the post.
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All the businesses are run with the intent to increase the profits and in turn increase in the owners equity. Thus it is obvious that corporations will also want to increase the shareholder's equity. However this should not happen at the expense of the general welfare of the nation.
For a corporation most desired way to maximize profit is to reduce the costs. For this many corporations resort to outsourcing, thus they may end up building production facilities outside the home country which are cheaper. This will lead to reduction in cost thus leads to higher profit. However this scenario may also lead to reduction in jobs in the home country. This gives rise to the statement that corporation neglects welfare of the nation and prefer the maximize the profits. Here it seems that the company is neglecting nation's benefit, but it is not considering the fact that if not for the outsourcing, a corporation's cost may soar so high that it could need to close down the entire operations in the country which would have a wider impact and the job losses will be higher.
For example we can consider the automobile industry. General Motors (GM) is a very old company established in US. One competitor of the GM is Honda. In past few year GM is incurring losses but Honda is doing relatively good as Honda's cost is less due the outsourcing. Rather than closing down GM, it is in the Nation's interest that GM outsource part of the production facility to the cheaper country. Apparently it would seem that there would be job losses but at the end it would help is reduction in job losses that may happen due to GM liquidation.
Secondly, these days growth of the country is directly linked with the performance of the stock indices as these indices include the representative companies from various sectors of businesses. If the profits of the corporations increase, it will contribute in the increase in indices in the stock markets. Thus it will directly influence an indicator which is a parameter to measure the growth of a nation.
In sum, as explained above, it can be clearly said that maximizing profits would actually help the nation and would not create any conflict with the general welfare of the nation at large.
Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations or reading.
If possible, please provide some feedback by replying to the post.
-------------
All the businesses are run with the intent to increase the profits and in turn increase in the owners equity. Thus it is obvious that corporations will also want to increase the shareholder's equity. However this should not happen at the expense of the general welfare of the nation.
For a corporation most desired way to maximize profit is to reduce the costs. For this many corporations resort to outsourcing, thus they may end up building production facilities outside the home country which are cheaper. This will lead to reduction in cost thus leads to higher profit. However this scenario may also lead to reduction in jobs in the home country. This gives rise to the statement that corporation neglects welfare of the nation and prefer the maximize the profits. Here it seems that the company is neglecting nation's benefit, but it is not considering the fact that if not for the outsourcing, a corporation's cost may soar so high that it could need to close down the entire operations in the country which would have a wider impact and the job losses will be higher.
For example we can consider the automobile industry. General Motors (GM) is a very old company established in US. One competitor of the GM is Honda. In past few year GM is incurring losses but Honda is doing relatively good as Honda's cost is less due the outsourcing. Rather than closing down GM, it is in the Nation's interest that GM outsource part of the production facility to the cheaper country. Apparently it would seem that there would be job losses but at the end it would help is reduction in job losses that may happen due to GM liquidation.
Secondly, these days growth of the country is directly linked with the performance of the stock indices as these indices include the representative companies from various sectors of businesses. If the profits of the corporations increase, it will contribute in the increase in indices in the stock markets. Thus it will directly influence an indicator which is a parameter to measure the growth of a nation.
In sum, as explained above, it can be clearly said that maximizing profits would actually help the nation and would not create any conflict with the general welfare of the nation at large.
