The success and effectiveness of a manager will result in investors in the manufacturing company or people who withdraw their investment. Investors in a capital market can view a company’s performance through earnings reports, using different ratios, and let us not forget balance sheets as well. A capital market can be a basis for income of sorts aside from merchandise. In essence, a manager can only be so effective without the means to support production in a manufacturing company. The strength or limitation of a capital market will result in the indication of how well a manufacturing company market value will be perceived.
The social responsibility of business is to increase its profits while maintaining integrity and loyalty to its consumers. Since responsibility is a human characteristic then it is the duty of the managers to ensure they meet the desired outcome of the owners/executives. In most instances the desired outcome is to make as much financial profit while adhering to all business laws and ethical practices. Business ethics relates to the good or bad things that occur in business practices. Many times the bad situations that may arise do not happen on purpose and the effects that they have on the consumer may be short lived.
Economic Goals of Business and Government VS Social Goals of Consumers Milton Friedman suggests that the social responsibility of a business is to increase its profits (Boardman, Sandomir and Sondak 221). While increasing profits is certainly one of the most important factors in a successful business, is it considered a social responsibility, or better yet, the only social responsibility of a corporation? Friedman seems to think so. But why is increasing profits a corporation’s social responsibility? According to Friedman, “A corporate executive is an employee of the owners of the business.
Company mainly focused on maximizing the shareholder value by the CEO and other management’s managerial philosophy. Currently, Hill Country uses a risk adverse strategy to choose their business or project. Hill Country’s industry is high competitive but it kept going well with cost efficiency and quick reaction to customer requirements. From these reasons, Hill Country has few risks. However, analyst and experts present that Hill Country’s excess liquidity with zero debt is going to lose benefit and fail to maximize the shareholder value.
That’s greed. The incentive to do these things is to be as successful as possible. That is the “American Dream.” That is why the US is the way it is today. Capitalism does have its strengths and weaknesses but the strengths outweigh the weaknesses. For example, greed causes businessmen to compete with other businessmen, thus, keeping prices reasonable and forces them to keep up with consumer demands.
Executives are hired to act as fiduciary agents of their stockholders for the purpose of increasing wealth (Smith, 2003). He argued that CSR amounted to spending the stakeholder’s money that clouded decision making by reducing the firm’s focus on maximizing profits, thereby placing the firm at a competitive disadvantage (Smith, 2003). Friedman’s approach is practical and takes into account the interests of both firms and society. However, it is not realistic to think that a firm can separate business and social responsibilities. According to Mintzberg "the strategic decisions of large organizations inevitably involve social as well as economic consequences, inextricably intertwined...there is no such thing as a purely economic strategic decision."
Something else to be considered is that when a company uses money for share repurchases when it could be paying a higher dividend instead, the company’s management is limiting your control and increasing theirs. As a shareholder in a company that makes uses of share repurchases, you have to rely on management’s ability to judge whether it’s an appropriate time to repurchase shares, whereas with your dividend, you have complete control over that choice. The flexibility of dividends for shareholders is great, because if allows you to direct your flow of income to where you think the best investment opportunities are at any given time. Share repurchases lack that
Businesses in the private sector are those which have profit as their main objective which is given to its owners. How did privatisation improve the efficiency of former public sector organisations? The profit motive is a more effective way of reducing inefficiencies in production than an form of monitoring of public managers. Also a more efficient firm improves efficiency of the industry. The more competitive the industry the greater the improvement in output, profitability and
In our current economic climate, the Keynesian model of economics is more accurate. Business owners operate their business outside of government control and without much thought to the economic situation. Their goal is to build revenue and raise net worth of their company. With this being said, prices are in fact “sticky”. Even though the prices will lower of time, companies will take advantage of the recession, knowing that consumers still require their goods, no matter if it falls outside their budget or not.
The EVA trend seems to be almost mandatory for the larger companies, but there is no reason that it shouldn’t work just as well for their smaller firm. The implementation of this decision tool would benefit the company in three distinct ways. First of all, EVA data would provide stockholders and potential investors with comparable data to their competitors. If the investors are looking for EVA valuations to help make their assessment of companies, then it would be dutiful for OSI to provide this data. Stock prices are determined by