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The profit maximization theory states that companies or coorporations will place factories where they can achieve the highest total profit. The company will select a location based upon comparative advantage (where the product can be produced the cheapest). The theory takes into account the characteristics of the location site: land price, labor costs, transportation costs and access, environmental restrictions, worker unions, population, etc.. The company will then decide the best location for the factory in order to maximize profits. So in a sense, the companies are not being socially responsible because they are placing their factory somewhere in order to gain the maximum amount of profits. They do not care whether they destroy the land, pay unfair wages, or exploit a country. The only objective is to earn more profits.
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When was The Social Responsibility Theory created?
The Social Responsibility Theory was proposed in the 1950s and gained prominence in the 1960s as a response to the growing concern about the impact of business activities on society. It emphasizes that businesses have an obligation to act in ways that benefit society beyond just maximizing profits.
Explain baumol's sales maximization theory.?
maximising sales and it is where AC=AR..this the point where the maximum amout of sales take place. The firm only makes a normal profit at this stage.
What is the researching on corporate social responsibility?
Early 20th century, the traditional economic theory and reality of corporate behavior in order to maximize profits for the only goal the serious social problems, some far sighted entrepreneurs and scholars have proposed a new concept of business ethics corporate social responsibility. After half a century of debate and development, corporate social responsibility is becoming clear thinking, and its theoretical essence lies in the pursuit of economic efficiency requires companies to achieve their profit targets than take on social welfare and the promotion of the general maintenance of the responsibility.
Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
Maximizing Profits
Social learning theory vs social control theory?
Social learning theory posits that individuals learn behavior through observation and modeling of others, emphasizing the role of social interactions and reinforcement. In contrast, social control theory focuses on how individuals are constrained by social norms, values, and expectations to prevent them from engaging in deviant behavior. While social learning theory suggests behavior is learned through social processes, social control theory emphasizes the importance of social bonds and attachments in regulating behavior.
The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is?
It is called a "fiduciary" responsiblity.
What are three economic that a government may have?
Three companies that have take a defensive stance to social responsibility are R.J.Reynolds,Walmart,and BP.Social responsibility is an ethical or ideological theory meaning that business should act beneficently.Cha Cha!
What are three economic stances that a government may have?
Three companies that have take a defensive stance to social responsibility are R.J.Reynolds,Walmart,and BP.Social responsibility is an ethical or ideological theory meaning that business should act beneficently.Cha Cha!
What are the normative theories of the press?
The normative theories of the press are four main theories that seek to define the role and responsibilities of the media in society. They include authoritarian theory, libertarian theory, social responsibility theory, and Soviet communist theory. Each theory advocates for different principles regarding the press's relationship with government, freedom of speech, and social obligations.
Is social conflict theory and conflict theory the same theory?
Yes, social conflict theory and conflict theory refer to the same theoretical perspective that highlights power struggles and inequalities within society as the root causes of social problems. Social conflict theory examines how various social groups compete for resources and power, leading to conflict and change within societies.
Why is the distinction between insurable and uninsurable risks significant for the theory of profit?
why is the distinction between insurable and uninsurable risks is significant for the theory of profit
What are the difference between the goals of profit maximization and maximization of shareholder wealth?
The diffence in laymen's terms is all within the focus. If one is maximizing shareholder value, they are simply placing focus on what can raise value in the "short term" (increase stock price). If one is maximizing company value, they are looking from a different point of view which is usually on what you can really sell the company for, intangibles such as reputation, products in the works, workplace, etc. A person would be looking towards the future "long-term" outlook with this perspective.
