If all companies had an objective of maximizing shareholder wealth would people overall tend to be better or worse off?
When a firm maximizes its profit, it automatically maximizes its shareholder value. When both profit and the shareholder value increase, in course of time, the overall firm value will increase. All these would undoubtely increase its share price in the market as well.
The overall objective of NGOs (Non-Governmental Organizations) is to address social, economic, and environmental issues by working for the welfare and development of communities. NGOs operate independently of government control and focus on areas such as poverty alleviation, education, healthcare, women's empowerment, environmental conservation, and human rights. Their primary goal is to create a positive impact by providing resources, support, and advocacy for marginalized and underprivileged sections of society. One such organization, Standards Sunrise Foundation, is committed to uplifting the helpless by providing food, shelter, and support. It also organizes music and dance events to spread awareness and bring joy to people in need. Established in 2022 by Neelam Dhingra, the foundation works to make a meaningful difference in society by collaborating with like-minded individuals and organizations. NGOs play a crucial role in bridging the gap between government initiatives and the actual needs of the people. They work at the grassroots level, ensuring that help reaches those who need it the most. By fostering community engagement, raising awareness, and implementing sustainable projects, NGOs contribute significantly to social transformation and humanitarian development. Their ultimate objective is to create a fairer, more just, and compassionate world.
"Maximizing overall happiness or well-being."
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A firm's main objective should be to make decisions that maximize the value of the company for its owners, and as the owners of a company are its shareholders, the main financial objective should be 'the maximization of shareholder wealth'. Since shareholders receive their wealth through dividends and capital gains, shareholder wealth will be maximized by maximizing the value of dividends and capital gains that shareholders receive over time. Problems with the 'maximization of profits' objective: Firstly, there are quantitative difficulties associated with profit. Maximization of profits as a financial objective requires the profit to be defined and measured accurately, and that all the factors contributing to it are known and can be taken into account. It is very doubtful that this requirement can be met on a regular basis. E.g- If 5 auditors go into the same company, it is very likely that each will come out with a completely different profit figure. A second problem concerns the timescale over which the profit should be maximized. Should profit be maximized in the short term or the long term?? Given that profit considers one year at a time, the focus is likely to be on short-term profit maximization at the expense of long-term investment, putting the long term survival of the company into doubt. There are many examples of companies going into liquidation shortly after declaring high profits. Check out - Polly Peck Plc's dramatic failure in 1990! (good example) The third problem is that profit does not take account of or make any allowance for risk! It would be inappropriate to concentrate efforts on maximizing accounting profit when this objective does not consider one of the key determinants of shareholder wealth. So the 'maximization of profit' is not a suitable core objective for a company. That is not to say that a company does not need to pay attention to its profit figures, since falling profits of profit warnings are taken by the financial markets as a sign of financial weakness. Instead these sort of profit targets/objectives should can serve a useful purpose in helping a company to achieve short-term or operational objectives within its overall strategic plan.
why? isn't it to adjust it downwards to max. shareholders wealth?
The main objective for deregulation thus is to increase the overall efficiency in the sector, which implies use of expertise to reduce shortcomings in technical, Managerial and overall operational fields. Ajemrena Fidelson Delta State Polythecnics, Ozoro 07060437091
Utilitarianism focuses on promoting overall happiness and well-being, making decisions based on maximizing the greatest good for the greatest number of people. It encourages impartiality and equality by considering the interests of all individuals affected by a decision. Additionally, utilitarianism provides a clear and objective framework for ethical decision-making by emphasizing consequences and outcomes.
"Utilitarian" refers to the ethical theory that promotes actions that produce the greatest overall balance of benefits over harms for all individuals involved. It emphasizes the importance of maximizing the overall well-being or happiness of the greatest number of people.
a strategic objective is an objective that is in alignment with the overall strategic direction of the organisation which is in turn in line with it's mission and vision. Objectives should always be SMART which means Specific Measurable Achievable Realistic Timely or time constrained.
Obtaining pure uranium and compounds for industrial and military applications.