AAMC #8 Essay 1: " The primary goal of every business should be to max. profits"

[zut212]

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AAMC #8 Essay 1: " The primary goal of every business should be to maximize profits."

What do you think he means?
When is this NOT the case?
What determines whether or not this should be the case?

This is my essay below. I realized that I didn't have enough time for this. Youch. This was slightly tough. My ideas came all scattered.

The original author of the above assertion believes that a business' sole goal is to maximize economic profits, even at the expense of other criterias, such as environmentalal impact, worker's rights, shoddy quality of products and services, and societal costs. Without a doubt, the performance of a stock is measured solely on its market capitalization (i.e. the price of the stock), and the market capitalization's value is largely, but not entirely, based on the earnings of the business. The goodness of the company's stock, however, is not based on the environmental impact or societal degradation caused by the company. Therefore, this reasoning is valid, especially if we take a short-sighted view of a business' purpose.

However, we see that the most enduring corporations are ones that have enhanced societal costs, worker's rights, and high-quality products. If we were to take a more far-sighted and high-level view, we would see that trying to maximize the profits of a company can have deleterious effects on worker's morale given that their pay has been compromised in the zeal for maximizing profits. The worker turnover is increased, and management has to resort to training new employees or resorting to unskilled labor that is easily replaceable. By paying the employee more competitively, at the expense of profits, the worker is more likely to stay at the company, take pride in his/her work, and take a more active role within the company which could help it increase efficiency or improve quality.

Another case where a company's goal may not be to maximize profits is in the desire to cater to a niche audience and increase profit margins. If a business' sole purpose were to increase profits, then every store would try to serve everyone without any specialty. This would have the effect of commodotitizing a product or service. A commodity can only compete on price, and hence, this too could be detrimental to a company's bottom line. A company like Whole Foods is a lot smaller than a grocery chain like Albertsons in terms of profits, but their profit margins are much higher. This is because Whole Foods, although they sell commodities such as sugar and vegatable oils, are able to command greater prices for this due to their niche presence.

The biggest determinant in when a business should maximize their profits or not is dependent on the share holders that they cater to among other things. Do the shareholders value highly leveraged growth? If this is the case, then a commodity based business without brand recognition tends to solve this. On the other hand, do they esteem profit margins? If this is the case, then niche branding is desirable.

 

[Rabolisk]

OK, I think this is a decent essay, but I will be extra critical.

First, I don't like the very first sentence. It just sort of restates the prompt without explaining any terms or contextualizing anything. You link stocks/market cap to profit, but don't explain why a business should care about market cap in the first place. Goodness is a bad word choice, use quality instead. I would have argued that no business, regardless of its nature, can exist without profits, and that the reason that people form businesses is to earn money. I could have talked how that is the basis of capitalism, etc..

Your second paragraph is fine, but you could've concluded your idea even better. I really like your first sentence, except for societal costs (which is opposite of what you're trying to say). You meant societal benefits. I would've added a sentence at the end of the paragraph that strongly emphasizes the belief that short term profit should be sacrificed if a company is to endure in time. Also, he/she is a bad writing technique, stick with he.

There is no need for third paragraph. One good counterexample is fine. However, had you stuck with that example, your fourth paragraph still needed to be better. The first sentence of the fourth paragraph is very wishy-washy. You could have said that niche brand and higher profit margin, even with lower absolute profits can prove useful in the survival of a business in the long term. Not sure bringing shareholders in was the best explanation.

I think you should synthesize your ideas better before writing. Overall, you have a good command of language and organization, so I think better planning should be enough to fix your problems. Just my two cents.

By the way, how are you doing on your full lengths?

 

[zut212]

I was short on time in general. I took the actual last thursday, and i wis that i had more time.

 

[TieuBachHo]

In 1st paragraph, it looked like you were sidetracked by assuming that maximizing profits was equivalent to societal and environmental expenses. Maximizing profits can also mean capitalizing on assests as a foremost objective goal. Without profits, the company wouldn't function at all right? Just explain what does it mean to maximize profits? How does it fit into the company's primary goal?

Second paragraph is about SHOULD maximizing profits be the ONLY objective goal. Then you can address the societal and environmental concerns are equally important as welll, give some examples and counter-examples. Your examples here are good too.

Third paragraph should be a synthesis of both your examples and counter-examples. For instance, if a certain type of company sole objective is to maximize profits, the negative impacts are far more costlier than blah, blah, blah ... So, ... here is your conclusion of why that should or should not be the case.

Just a thought.