Maximizing Business impact

Maximizing Business impact

Introduction

As a token of appreciation for the privileges they had, governments in the past mandated that organizations serve the public in a particular way. That perspective, however, faded in the 1970s, when corporations were formed purely for the aim of maximizing profits. Corporate social responsibility is not a common feature of business philosophies at most companies. The primary objective of every enterprise is to bolster expansion and longevity, particularly in lean economic periods. Profit maximization is, in the opinion of many business owners, the primary goal of running a company. According to them, production, expansion, and diversification costs must be met by profits. But this is an incorrect viewpoint. The primary goal of a business shouldn't be profit maximization since this promotes exploitation.

Exploitation of Consumers

Exploiting customers is one of the drawbacks of operating a company with the primary goal of increasing profits (Bowie, 2013). Within the marketing domain, a well-known principle is that contentment with customers breeds loyalty, and loyalty breeds higher profitability. Nevertheless, a lot of companies don't think much of client contentment. In order to maximize profits, they bind them with contracts, charge fees, and apply penalties. Numerous businesses exploit ignorant and perplexed consumers by providing false information that causes them to make poor purchasing judgments (Bowie, 2013). By employing aggressive tactics that disregard their needs, some businesses take advantage of their clients in this way. They offer low-quality commodities and overcharge for goods and services, for instance. 

Three industries that prey on clients' ignorance or lack of proper information are cell phone service, banking, and credit card companies. Many consumers are unaware of the repercussions of breaking regulations pertaining to things like credit limits, minimum balances, overdraft protection, and payment deadlines. These companies impose heavy fines on customers rather than teaching them about the sensitivity and consequences of breaking such laws (Bowie, 2013). Pricing techniques that are friendly to customers are often used by new enterprises. But with time, they alter their tactics to take advantage of clients and increase revenue. Products and tactics that are focused on the customer become those that are focused on the business. These tactics are effective for a while, but eventually, they fall short when disgruntled customers sue companies and go to other ones (Mackey & Sisodia, 2014).

Exploitation of Labour

The act of applying unfair policies to employees in order to maximize profits is known as labor exploitation (Miller, 2016). Many companies underpay their workers, disregarding their value or level of experience (Bowie, 2013). The corporate culture of undervaluing employees gave rise to the recent push in the US to raise the minimum wage. Exploitation tactics, as previously said, are effective for a short period of time before turning against the user. For example, a business that uses exploitation to boost earnings may afford to grow into new markets and launch new goods. However, expansion requires more personnel. The business must outbid rivals and provide a somewhat higher salary in order to attract competent candidates (Miller, 2016). 

One of the most crucial components of production is labor. As a result, it is crucial that all companies provide for their employees. Strategies aimed at maximizing profits disregard employees' interests, which has a detrimental effect on their motivation (Bowie, 2013). Benefits, like paid time off, subsidized gym memberships, and bonus programs, are a few successful strategies for inspiring staff members. Businesses frequently invest financial resources in employee motivation initiatives since undermotivated workers produce less (Mackey & Sisodia, 2014). As a result, both the overall business output and the quality of their jobs decline. According to a recent study, CEOs who prioritize employee well-being over financial success tend to have highly engaged workforces. Better financial outcomes are attained when there is a high level of employee involvement.

Abandonment of Long-Term Business Goals

Since it cannot be sustained over the long term, profit maximization is typically a short-term objective (Miller, 2016). As was already established, a company's long-term viability is jeopardized when employee and customer demands are neglected. Employee disengagement and loss of motivation results in lower corporate output and revenue (Bowie, 2013). Customers, on the other hand, defect to other companies that respect them and provide superior services. Providing high-quality goods and services at reasonable costs is crucial in the fiercely competitive and international business environment of today. Furthermore, providing excellent customer service is essential for a firm to thrive (Miller, 2016). If maximizing profits is a company's primary priority, then these goals will not be met. 

Developing a model that seeks to gain customers' confidence and trust in order to gain their loyalty is one way to achieve business sustainability (Ims & Pederson, 2015). In order to achieve greater profits over the long run, many leaders who strive for corporate sustainability sacrifice short-term revenues. A company's ability to survive for a long time is compromised by profit maximization. Business owners should strike a balance between the requirement to turn a profit and the goal of building a long-lasting company that benefits society (Ims & Pederson, 2015). This does not mean that companies should disregard earnings because they require capital to run effectively. Profits ought to be their secondary objective, and sustainability their main priority.

Abandonment of Social Wellbeing

Miller (2016) posits that firms have a crucial obligation to society, which is corporate social responsibility. Businesses should give back to society because they could not survive without it. Businesses have an obligation to improve communities as they are there by virtue of society's benevolence. Based on Ims and Pederson (2015), companies should aim for adequate earnings rather than maximum Crucialofits in order for them to adopt corporate responsibility practices. A few corporate leaders argue that one tactic used by companies to boost earnings is corporate social responsibility. People view it as a long-term profitable investment.

Conclusion

Any firm is built on its shareholders, and if their interests are not upheld and promoted, the company will either collapse or cease to exist. Every company generates profits in this sense for both its own expansion and the benefit of its investors. Maximizing wealth was capitalism's historical objective, and as a result, it became the objective of all firms. For businesses to expand and survive, profits are essential. They shouldn't, however, be sought at the price of clients, staff, or sustainability. The claim that investors' high-risk tolerance justifies profit maximization is flimsy and unpersuasive. Prioritizing customer and staff welfare over profit maximization is important. Customer happiness and employee development are the keys to long-term corporate success.