The Myopic Goal of the Firm from a Purely Free Market Perspective

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Essay #: 063505
Total text length is 5,338 characters (approximately 3.7 pages).

Excerpts from the Paper

The beginning:
The Myopic Goal of the Firm from a Purely Free Market Perspective
According to the neoliberal economic perspective, the goal of any firm is to maximize profit as a means to reward shareholders for their investment in the business. Within the free market capitalist system, managers and employees make decisions and take actions that will accrue revenues at margins that add to the firm’s bottom line profitability. While this profit maximization creed appears to be a rational sentiment from a financial management standpoint, the ability for firms to aspire for such a narrow minded goal in this day and age seems overly myopic. Rather, firms that are positioned to realize and maintain long-term profitability must look for ways to increase the...
The end:
..... into account multiple factors, unlike Friedman’s rather narrow assertion about profit maximization. While no firm will be able to operate in perpetuity without profits, smart managers look to profit by cultivating relationships and partnerships with key stakeholders so that multiple groups realize an increased level of economic value.
Works Cited
Friedman, Milton. “The social responsibility of business is to
Increase it profits.” The New York Times Magazine. 13 Sept
1970. University of Colorado. 25 October 2010.
http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Malcolm, Susan B. and Hartley, Nell T. “Peter F. Drucker:
Ethics scholar par excellence. Journal of Management History, 15.4 (2009): 375-387.