Business is essentially a social institution and not merely a profit making activity.Explain?
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Answer:
The primary objective of any business enterprise isprofit maximisation. This is becauseprofit acts as a measure of success and at the same time is the main source of income for an enterprise.
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The main objective of business is an economic and social responsibility that entails to to produce goods and services for the people of the society. It is necessary for they to operate according the laws and regulations of the land. They need to follow the ethical responsibility that is expected from them by the society. Therefore business is essentially a social institution.
Explanation:
- Business is mainly a social institution and not a profit-making activity since it entails a sense of social responsibility. Social responsibility refers to making decisions and performing the actions that are desirable in terms of the objectives and values of our society and business profits.
- The business has employees working for them and they should provide them with fair wages and working conditions. The business have a responsibility towards the shareholders and the investors who have invested in the business to make it a success.
- Since business uses social resources such as human and physical capital and it cannot separate itself from society and affect the lives of other people.
To know more about social responsibility
Define social responsibility.
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