Answer:
Ans. A layman may say that profits are the only objective with which a business is carried on but a good business man cannot keep profits as his only motive. A business organization is an economic unit which makes use of various factors of production. Capital is one of the factors of production. It pays interest in the form of profits. Urwick has put it beautifully, Earning of profits cannot be objective of business any more than eating is the objective of living. There must be other objectives of a business which are nonmonetary but as important as monetary, like employee satisfaction, innovation, productivity, consumer satisfaction, etc.
Following reasons can be given to justify our opinion that profits cannot be the sole objective of a business.
(a) If we make profits to be only objective then interests of consumers, employees and society will be ignored.
(b) Maximum profits in the short run, may result worse for long term interest of the company.
(c) In present day scenario, when consumer awareness is increasing, labour laws are becoming stringent, social responsibilities of business is being highlighted, the environment is being talked about, a business needs to set its objectives for satisfaction of consumers, employees, environmentalists, government, etc.
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