2

NATURE AND OBJECTIVES

OF BUSINESS
LEARNING OBJECTIVES
After studying this chapter, you should understand:
2.1 Definition and Concept of Business
2.2 Characteristics of Business
2.3 Necessity of Business
2.4 Business as an EconomicActivity
2.5 Objectives of Business
2.6 Role of Profit in Business
2.7 Objections against Profit Maximisation
of being busy. But it is a very
In the literal sense, the term "Business" means the state
human activity. Business is really
wide connotation of business because it covers every
services with the aim of
concerned with the production and exchange of goods and services
and selling goods and
earning money. Business creates utilities by producing
to satisfy human wants.
OF BUSINESS
2.1 DEFINITION AND CONCEPT
something of value, whether
Business isan activity, in which diferent persons exchange
organised or systematic activity
goods or services, for mutual gain or profit. It is an involves regular or recurring
involving the satisfaction of human wants. Business
of earning profits through the
purchase and sale of goods and services with the purposethan a single isolated transaction
satisfaction of human needs. Repeated dealings rather
business. Business may be distinguished from other activities by the fact
constitute for sale and not for personal
purchased are meant
that goods and services created or
consumption.
Definitions of Business
Some of the popular
Various experts have defined business in different ways.
definitions of business are given below:
producing or
"Business may be defined as a human activity directed towards
acquiring wealth through buying and selling of goods." -L.H. Haney
18
 facilitate
banking, Capitalproducer buys uslomersata
e-g., cConomically. nts. Ihe 2.2 acquiring orappears Hooper price.
has of Considers
like includes whole" a and
insurance ior Sne societythlo e
wordsCreation
of VI. of
g0ods
bread, goods ko
Ue
CHARACTERISTICS
It
salient
BUSINESS OF
exchange
Business
Urwick,public manufacturing
These sale
The"Business *BusinesS"Business IS *Economic
activities
is proti sfor
Busincss "Business
insurance,
buying goods.Dealingsmakes It adds wealth
to
privategoods transport in which servicesand
tea, and features
ofmay
be Hunt,utility definitions wholemarket the gai undern.
like profit". time, comprehensive th e
shoes, services goods beneit is IS
and rawConsumer goods
in business ItRoger,"a through triedservices
only complex orany 1S
Services
mayetc. of be and gain industries
and otherwhichany
enterprise sumnof a a an
selling
trade.in goods carries place,
utilities. rendering profits".
privatefor torm
incentive
etc. Business business defined
and as but institution
materials, sellingfoavailable
r Owens to highlight
the so enterprisememberstheof of
Producergoods the enumerate are
rendering field those
and goods services on perfornned of
of be form,
satisfaction undertaken sole and activities all earningfor
goods as but which
commerce of activity
considered
machinery, services. for enables Business are an
does
focus
motive the the servicesengaged
on of
arethem from and organiscd
goods use exists to given economicfor various on different of network
serve whosc private
by meant possession not pursucd
to place
in people a providing primarily service
of for distributes
makes, involved
or in
ercoming
various Everyfuture makesbelow: of
price point community belhalfthe
asetc. are others.
for human types business
and
industry,
services,
ancillary and
ofprice." athe in and
intangible used ofdeliver
createand activity aspects
interpenetrate prinmarilyoperated
Services directbusiness surplus to utilities goods with out is production
for Goods through satisfy wants, the business of
goods fo r also profits Nature
the whereas
th e need productionandthe activity is
the use which of
and like to
their more object purpose benefit and business. a industriesbasicthe are with to and
production enterprise
by may storage the to with part and provide
invisible the involvesdefinition services some the and termed Objectives
hindrances transport, be placewants
varioususeful
of activities. His of provides
are any conducted." the
satisfaction value to an business.of of world distribution -Urwick Hunt
and
ultimate
consumer (time earning
element society.business.Haney'sdistribution, banking, able -Keith Carlo
and -James
Stephenson objective
business
as goods
of to
goods. ofproduces scarcity more types satisfy
regular to of Owens
-R.N.
willingand to
distribution Business".
of -B.O. Business
of
warehousing, consumer utility). people -EC. Dicksee-L.R.
and
consumers, effectively profits Definitions business
of of activities definition
Wheeler processing article or of
goods risk.transfer Hooper of Wheeler services
and/or (place goods. human goods carning
and for 19
or or a as
 sale
or
repeatedif Therefor
sell But usually essential loSs. standards
isolot exchan it implies policies, as part
person who sells all and
personal
become
business money
single exchange.
in is earned cause activity a
or pricethoseand are money.of environment. But
business. money.Onlyform principles
"a
Plowman,
and
ifa
Recurring transfer "any Profits
food business".
RiskparcelGovernment
alsoinsurance. living
economic
NCE
þusiness
GILANCE
instance,
called
to be not requires
society.
a Druckerprofits. make
however, risk.and earning
services etc. the do
becomeinvolve if cooks certain
all
services
and
goods business. consideration
example, to assuming theft,
uncontrollable improve
part and the activities
it to ownership./
Forthe
seller
gets a earn society for because A
he is
Peter competition, an on AT
will activities
and must, a forecasting
employees, services of common
Petersonbusiness." business. goodswhen service to is primarily
to
resources based BUSINESS
constituteit For to Profits
exploit Risk
regularly,The
is
According
business
for helps Non-economic
art
But
them. or and
business
delivers reward and
loss. an is are
business
though of consideration. product
business, business. by correct it scarce is it of
in to
According
mean
feature never demand, is goods
because becauseform
characteristics
Dealings
not cars All for of of uncertain
strike Business Business OF Price
business. the possibility through of
willalone
or essential
Business
pay a aim should of andCHARACTERISTICS
Services
for
exchange. not marketingg of is earthquake,
fashions, distributionbusiness.
utilisation
institution science
to primary
dealings.
basis.sale
scooters growthProfit in science. size, Exchange
some willingis becomes Businessfunction risks activity.
XI andandnot money.it the mentioned
nature, andDealings Science
Class an family, The risk. in a
and Utilities
aregular
purchaseis sells or for
is and
through as or reduce andsocial effective as also Goods or Activity
in purchase
it transfer, well fire, eliminated. included Risk
Continuity car anddealings
for services
of motive.mneans. profit
Commerce it of enterprises
tastes Economic
production wellis their in Transfer,
Motive as
5.
Profit
able
termshis price, as Element Food, a It of in Continuityof7.Economic
well
on
undertaken
if or shop itself survival can above
alsothrough as experience. Dealings Elemnent
of Creation
of of scooter
of and
Sale, areto fair of
V5.Profit customers'
businessman are irrespective Sale,
as
transaction
transaction in
a regularityexpressed
food
a fyfils ad uncertainty be risk. is Art Art
ISC
3. opens 4. goods and for 6.
Business
7. business
inyolves busine[s. The
activities
1. 2. 3. 4. 6. 8.
old others
serves the create cannot people 8.
them
20 his he of that forlegal and
in
 uponwealth
growth
thcwill makeincrease. andmillions
rapidly the purchas1ng through
satisty therebyits
improve by
needed theindependence.
Business not a religions. socially
people. society. for
theirof andsociety.
21
wealth.
create
to over-burdened establish
provide In services.
toorder of mutual
understanding
cannot Buyingmany
indirectly."
it cnterpriscs to on does satisfaction
Business depends But financial,
gencrate is to due to consumers pressure amongst the
can
productve
resoOurces, jobs employment servicesto productionrequired. it nationsotherin
different and series
and life everyday.
trade the products which
countries.
and peace
day.
by welfarecivilised of
of country people everything
produce goods fewor
Objectives seek increase economic and
activitics Business and reduce life between movement and for natural, directly
naturalof
improvements
whoalreadyindustry andto better and is products to day of andutility the and us abut
education,
human
a income offers demand currency other belonging culture,
education
types with
and of ofher
trade
business persons to products to achieve goods of for facilitates
increasing
modern are us
Itbarriers.
devclopment productively. is dealings and
Nature abundant helps and to enrich significant
helps essential health,
art, various
creates
utilisation is these of
in
Business output country weather
capita agricultural
sector
emplovment and new increases foreign people these all
of of
Business not It to to
on fact, financing,
technological range eniov nation can Business contributes
public Business of
rcasons. have per number
nccded information can exports. other
surplus politically go of
require lives
problem. which
country. activities
Business andthe In "businesslike
production
and utiliscd
cconomic country
consumption which cooperation. the
may use So
that wide can
living. a and in of
allocation and
following The enables
through its another.community people growth
consumers.
for People for overcome
geographicalproducinginfluence
country
resources
are resources
use
of employment. serious a provide theA items foodsell business and business wants
BUSINESS country
like
India. scope them welfare.
The business.
Industry, of of exchange.andof can desirable, wants, for
activities.
standard in progress
means. exchange one several economic
the
propèr international
the poverty. A effective unlimited certain supplies
payments way essential
ncome.national abecome firms Increase
provides country of to the ultimate
wheeler. daily
firing,
business.
to social
course ever-increasing
other foreign come thishave
assist
OF2.3 duc
IssBusiness
NECESSITY until
these business Business further import culturally makes which
makes generate lt standards. foreign obtain
a In are and
removenational has is improve and of promote
theregionsenterprises beings amongfor resources
unan andwithout of
people. Similarly, programmes. activities wordshiring
of There
a unemplovment earn
To
V4. to balance In It activities
of pOr also to
advertisements can useful., wants.
umans eips
nations
people
To to Busi ninceasing.
Tocss
In of
people. To
range
wants.
living
has
contributing
earn
country
society.
and
Human
their Sibution theand
selling,
1. add renan .2. ,3.
of It to
people.
country's To
produce. Business
socially business
possible
ween In
nowerhuman heips V5.bettercastes, Iseful Salisty business
and of 12st their A D
 nerer in factorsthe means generatemay
make them The and various
the activities services.
of as Objc
witha For profit. other for employs businessnen. society. results
business Nationa
better enable reasons: not excess-of personal source
needs a
cconomic
position Businessmen
wants. selling arranges utilising as and
familiar income.
Business is
take called Business and bothof and
family and a his regulateof
can following human of in wealth. his He goodsis wants performance
satisfy activity
Business objectives
is business purpose capital,
He goods.goods
of person is
income from of
one services
for money. his expenditure
resources.business. andavailable the which Obj
satisfy and can Human
the of funds produce economic
satistying
if
a investor the earn profit labour, the
consumption publicneeds. he Various Objective
where ofBusiness
the
knowhelps of ACTIVITY
to an
to
earning for necessaryproduce income objectives
study due or generate his making
goods help vegetables to over scarce
of materials, to the their follows:
activitics activity is of has an of areabusiness.
andfornal of which object generation
income of by satisty
to to to businessman
requirements this as means every
importantcmploycc, ECONOMIC sell
means
undertaken the of the
required
needspublic regarded
certain
as
economic commodities His use of
businessA forgrows rawprovides andhelp a BUSINESS in a categories Obje
operations. to a of involve satisfy members.as of Social
as business.
vegetables is
excess as the services has needed
ibusiness
s enterprise the also prosperity
XI is customer, on
who such capitalsuppliers
a of
Thus, activities
be
Class business
of AN an are
which
carried businessman
activities needs With may and enterprise
study business. as selling a
farmer
This resources and family OF are broad
for their AS regarded income Objectives
Commerce better of is grows undertaking
business
vegetables. the production.thegoods
the
businessman.
business OBJECTIVES andfour
of The BUSINESS object
activities
ane
those
it and meet Business Obje
study andown because a Business from satisfy his businesssurvival Econom
whoBut an into
country.
be enterprises is The V1. producing A
Scarce these of
production. Thus,
ISC The can his Business farmer
any
is growing
business.
to
the resourçes.
materials activities needs generating activities. classified
launch activity market of 2. of Sources V3. buy the Every affect
a One 2.4 end use
assist
canfor the 2.5
22 by a
 are income. is livea producing modernisation
growth the of andare wordscreate in wealth-producing
providing
tastes,creation
supply by
satisfies
business. of designs,
and world.all maximising
23 enable firmsto designs
production, ever-increasing
newby
objectives Profitcannot force and days
as enterprise.
needsthere it sciencecomprises (R&D) explore customers
Business follows:
some business. and serves theto keeps wants,
must services these business Business
new
Profits the whenIn purpose; without Therefore. It
of salesmanship. new
person wealth expansion the Modern andmanagement, Development
and objective introduce
of primarycarning by satisfy services. the business In creates to

75/4
the alsobusiness It
Objectives as profit. or only and change. the machine.
costs etc. hasold
satisfy
are start
a the for business
businessentrusts satisfy
succeed
as Profit God prices. goods in accounting, businessretain
for intactthe
its businessto Justwithout capital to profits
and profit, economic it etc. innovation the technology,
people
established a by efforts and and whenvarieties, to
and Thercforc, for future. society
can to newminimising
in and and to
unit. maintaining of goodsof of exists reasonable requireddynamism
Nature necessary progresscreatedearn definitionfoundation earn advertising only improvements also
customers
of business a costs
of inspiressurvive flow
business businessman's important of andResearch
objcctives in can his that Business
to new for invention
successful newminimisehas
is
activity.cntemrise operations order the personnel
continuous for
and not businessman customer scope product,
techniques, It
cannot also
thatevery valid No at producing of developcreate
customers.
by are pay the enterprise".services through in
is efficiency, In
money. an organ them.
economic profits business greatthe involves efforts
economic firm Profit Profits andone is is
customers. be to to
customers an the of Theyprocesses
businessof business the
ensure
the
onlycustomer customers
by can improved to order to
business
survival fromA buy supplytheir and is a methods
perfecting
confined and
carning in resources. customers created It moreservices
stability,
customers.to is business Business
business innovations.
In
an mainA stay custonmers. customners.
time,
Profits "There
arise customers for of goods customers.
Objectives
Economic
1. basically profits.
of thea to of The to value
of
preferences creates utilities.
creating machines,
have not servicing, and attract
The satisfaction in better
its extension
hopefor food,businessman of They is a better-quality a
Innovations. money, tools
of business. It to
customer.
Drucker, of competition is made
technology and
nature.
Earning
barometer
Creating existence.
customers Business
resources needs Innovationto providing
is eSsential
the without capacity of enough introduce
newof markets
nature. benefits
selling
Business is wants better efforts invest wants
in and and and the and
It of of a
economic
() (i) (ii)
 social aim Objectives
and Social2. 24
(vi) (v) (iv) Employment
generation.(ii) responsi bilities
(i) objectives () of grBusi ow ness ISC
values
faithfullyhonestly
policies to Payment libraries,
(income andTheyreligiousSocial the and Fairsignificantemployment
andeconomic all. has functioning providesmooth
organisation and employees. Suchshould for Fair
environment business
the others financialcreditorsreturn Therefore,
appreciations become thereby
blackmarketing their
shoulItd
supplSuppl
y yis without Commerce
Government. can sharing remuneration also
ofand
our lawstheby and tax, dharmashalas, organisations.
welfare.
environment hygienic be
work. the be the ing shoul ofd in does
government
of
which help
in to
service a to the
distributed
It of of
business addition the not for
society. take at
thesales
health
serious because for is social desired goods Cl a ss
actions
non-governmnent
Business
investor.
the provision members profits employees. profits
the In and good be support exist
for right tax, render of to working addition service to X
and form
of obligation obligation
to quality and are
spending of their society.
cannot problem and
the ofthese misleading
among
wil employees. servicesgoods ascarni ng of in
which the time. excisedues. services hospitals,Business future Business of of of business. business. and a
investment.
should dividend Business and follows: socicty.
subsidiary vacuum.
Country.
Thus, These adequate the help Good employees help to and
prospects
be If
of at profits.
are on duty, Every
organisations congenial
unemployment society. living of wages th ese
desirable publicdirect
to
weaker enterprisessports provide expected
is It to business toEmployees business required
advertising. reasonable
customsbusiness and and should Employees is,improve working increase Busincss I1
They Government conditions
n and should According is
welfare. and ofinterest. for therefore, dutythe in aim
businessmen
should those bodies, full a salary to by a
in indirect sections support
business. should to the country provide recognition
tothe avoid part
enterprise (NGOs) conditions be the should bc
terms duty, can
Investors growth
payemployment
problem work the provide must
supplied
prices. must
Business andbuild fproductivity
or motivation a society. to of
of taxes
government etc.) of to be fair opportunities islike workers.
day
reasonable malpractices be therefore Henry sOciety.
society. research
like social, kept return unable healthy given Business
the should
to schools, increases,of India are of carning
should expectalso business
satety and their at
objectives provide the CRY,
informed opportunities employers of to beneficial and fair reasonable Goods Ford,
to unemployment to night It
pursue also pay institutions. cultural. shareholders of and part discharge
offer contributions is of cannot
revei tax
Help
colleges. activities. the for employes efficiency compensati like expected and
profit". "the
abiue jobs to safe of
d Ag. gainful boarding
a
and about socio
is
ensure towort proftt pricesservICe primär, Surve
a to the o t Th,
 4. busincss.
objectivesThese Objectives
Human 3.
Objectives
National
(iii) (ii) National
() (iv) (ii) (ii) () Business
objectives
Development
encourage
employment.
inputs new National
increasing a country. and scarceOptimum in and inLabour
maintaining
progress Participative
in
decision-making
employees.
management necessary business.
creativityvaluable for workers.
Developing
resources.
human Business Labour ofHuman
providedfactor
security.
Adequate
country the management
technology interests. objectives should developing business is
to resources best should help ru n
rge-scale growth self-reliance. Business management welfare. objcctives
to
experts utilisation
possible and can asset
forBusiness provisions for
achieve be
industry. by
Small-scale of It cordial for Such the
innovation utilising are in
should of kept management. of achieving
be given people
small-scale of and and should is business will processeconomic business new
improving Business
given
small-scale economic essentialmanner. of informed. employer participation should of
ndustries. its Employees usher
and
minimise cooperation. self-development facilitateof skills individual
should below: business
firms applicationreducing in is Itproduce resources.
of among due economic
are in and and ensure for
industries. the Judicious
for industrial development
thbusiness.
e Employees must
can independence.
industries as employee Employees
their recognition.
be people.
are
duty thgoods e rapid follows: should quality wil them. attitudes. talents
job made recognise
be in Business concerned
developed industry. dependence wastage
of allocation Business development satisfaction and
and also Labour
business in bedemocracy.
relations of This
Development for and social
which Big accordance balanced provide will should of Nature
should treated decisions.
th e Human must satisfying
their Proper the
business This of
asare
should
be dignity objcctives with is and
onscarceto and so
help country.
be a
ancillaries
necessary requires use as valuable allowedencouraging willprovided and
health, valuable Objectlves
imports. help economic withoptimum the honourable strive as Workers' ofresources
workers by opportunities the
firms in help aspirations
sense
natural to the skilled ofwell-being
the national nation's safety, of
ensure for human
labourand
which development
for
are government This growth
development
information to the
in the of business.
Human human of
expected resources. utilisation participation
creating manpower
take opportunities are belonging Business
generating
will priorities resources individualspeace growth the of
and should
provide clement
of
of part workers.
help most social labour.
to of in the of and and 25
to of in 1S of to be in
 Objectives
National 4. urkinC'Objectives
sS. Human 3.
hintes Thesc
(i) (i) National
() (iv) (iin) (i) (ù Business
obictives
Development
employment.
Inputs new a
small-scaleofincreasing
encourage and ScarceOptimum in and Labour
maintaining
progress management
decision-making Such necessary
inParticipative
participation
employees. creativitybusiness.
valuable
Devcloping for workers.
security.
Adequate providedfactor Labour ofHuman
country National country. the management business
technology interests. objectives should developing Is
to resources best should help
objcctives in
Business management
in welfare.
rge-scale growth self-reliance.
to
experts utilisation
possible be r and asset
foBusiness Business
provisions for
Small-scale achieve It
industry.
cordial for human utilising are in by
of kept management. innovationth e of be achieving eople
should will new given
of and and should
essential
is
business improving processeconomic business can should BusineSs
given of
small-scale economic
ndustries. its manne. informed.employer usher
Employees resources.
of
facilitate skills individual
should below: business and
application
industry. in minimise
in Itproduce resources. cooperation.
firms of among ensure due cconomic for
reducing is are in
development and and must
th e Judicious
for the
business. pcople.
industries. Big
can independence. as employeeindustrial Employees Employees
their recognition.be are
industries duty thgoods e rapid should quality
provide al
wisol self-development them. attitudes. talentsrecognise
be dependence Business follows: job made concermed
and
wastage
of allocation Business development satisfaction Labour
developed and
democracy. This
Development and social
business in be
relations of for Nature
which accordance balanced treated decisions. should of must
should will the Human satisfying
their Proper the
is
business This
asare scarce
of should
help country. be dignityobjectives with a and
on to and as so information be of and
health, valuahle Objectives
ancillaries
necessarydevelopment requires of help economic use valuableto wilprovided opportunities the
imports. withoptimum the honourable strive as Workers' allowed in ofresources
workers
aspirations
sense
firms natural to the skilled help ofwell-beingof
the national nation's ensure for safety. labour human
development by in the of busincss. of
which for are government Thiresources.
s growth
utilisation participation
creating
to
manpower th e are
opportunitiesbelonging
Business
expected individualspeace takeencouraging of and
and should
generating will priorities resources growth the clemcnt
of
provide part workers. Human
of most social human labour.
help the of and and 25
to in of in is of to be in
 business. reward
attract Profits
machinery tocontinuity
capital for to Profit 2.6 Innovations 3.
2.Earning
Profit1. 26
Drucker, undertaking start customers
Creating Objectives Economic
3. 2. 1. ROLE
earning ) (iv) ISC
capitalGrowth. various help andSurvival. Incentive. an
It people, business
disposal of and
Control
incentives helDevelopment
p toCommerce
from
serves business "profit and
ultimately ofenterprise
an is
OF
noise development
to
the
factors equipment the essentialPROFIT
utside. as
Profits enterprise.
is Profit
risk Profit welfare
Social
6. 5. Generating
4. remuneration
3, Fair 2. Objectives
1. Social
animals,
BUSINESS
of
pollution.
theon
over to industrialisation
rai se for
a tothe close and Payments investors Fair
employment employers to Quality
prices
fair smoke, the is Class
means of
is face risk and is of to is in IN pollution. standard of XI
obody
production.
the trade down. essential business.
In th
work businesse return and quality businessmen necessary
backward
of premium thereby the BUSINESS goods effiluents,
birds. Business |of
biggest driving of to OBJECTIVES of
nancing. cycles With
absence hard taxes livingbackward
likes at Iife. of Rapid f or
maintain the for due
to
source
and that the forforce wastes, 1S who in peace areas.
help of making to Labour 4.
Participative 3.Developing 2.welfare
LabourObjectives
1. Human industrialisation
responsible
invest covers profits, behind the management
Cooperation managementResourcesHuman make
must It backward set
of other survival andregions
In
capital
its of following AT etc. up Business
addition, shocks.capacity
money the
profits
it A factories progress
an every to
successful.
of GLANCE for areas. of
for costsbusiness
enterprise protect the is
in business proper
profits Profits to business. reasons: reducing expected
expansion
a create
of Pollution
controlDevelopment
5.
has in country.
Government in
aking of
4. 3.
self-reliance
Nationalutilisation
2.
Optimum 1. notified th e
staying
are can Profit
backward
areasDevelopment
business resources of Objectives
National arrangements the resulted
enable wealth. will and It country.
and also replace
eat it inspires
health the Balanced to
business
in is backward
adverse ef inoffers preferen give
prise. growth required Accord1ng ensures
business up the
and
obsolel its of air. It
rewardpeople region
to o own the small life for th wat area speci: wi l
to
 profits. other In profit ndustry and theobjective live profits".customers,
as. risks ismere busincss provide People
hargaining judgethe
reasons:
Despite Consumers,
DUSiness. L.7 hand not
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 28 ISC Commerce for Class XI

to achieve the profits. It considers profit as the ultimate goals of business rather than.
means to the real end. The ultimate aim of business should be social
welfare. If prof,
aximisation is considered as the ultimate aim of business, businessmen might try to
maximise profits by socially undesirable means such as profiteering, blackmarketin
hoarding., exploitationof workers and consumers, etc.
2.Profit maximisation overstresses the reward for Owners and ignores the interest
of other stakeholders. Profit is the reward for
capital and profit maximisation gives the
impression that a business concern is the domain only of owners. In reality, no business
can succeed without the fullest co-operation of labour, consumers, Govermment, and
the community at large. Profit maximisation objective overlooks the stake of these
groups in business,
3. Profit maximisation misguides managers to the point where they may endanger
the survival of the business. In order to maximise current profits, managers may
undermine the firm's future. They may ignore research and development, executive
development, pushing of the most easily saleable products, and other long-term
investments. Such activities threaten the long-term success of the enterprise.
4. Profit maximisation has capitalistic overtones. The advocates of socialism decy
the goal of profit maximisation on the ground that profit maxinmisation results in the
exploitation of poor by the rich. It also accentuates inequalities in the distribution of
income and wealth.
5. Profit maximisation is inconsistent with the modern trends in business.
Diffusion of share ownership, professionalisation of management, growth of institutional
shareholding, and the emergency of a distinctive technostructure are some of these
trends. The main goal of the technostructure (control by managers and technologists)
is survival and growth of business. Profit maximisation mayendanger long-term growth
and, therefore, the technostructure prefers long-term grówth. These professionals regard
profit maximisation as unrealistic, inappropriate, and even immoral.
A truly successful business can be built only if the objective of "service to the
society" is constantly followed. If this is done profits will come automatically, but if
the whole emphasis is on making money business may not survive and succeed for a
long period. The guiding principle of business should be profit through service. Every
business should provide a proper balance between profit motive and social service.