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متابعة

Describe how society's interests can influence financial managers?

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تم إضافة السؤال من قبل Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town
تاريخ النشر: 2014/04/06
SREEDEVI SUNILKUMAR
من قبل SREEDEVI SUNILKUMAR , Business finance officer , Emirates Airline

Sometimes the interests of a business firm's owners are not the same as the interests of society.  For instance, the cost of properly disposing of toxic waste can be so high that companies may be tempted to simply dump their waste in nearby rivers.  In so doing, the companies can keep costs low and profits high, and drive their stock prices higher (if they are not caught).  However, many people suffer from the polluted environment.  This is why we have environmental and other similar laws:  So that society's best interests take precedence over the interests of individual company owners.

 

When businesses take a long-term view, the interests of the owners and society often (but not always) coincide.  When companies encourage recycling, sponsor programs for disadvantaged young people, run media campaigns promoting the responsible use of alcohol, and contribute money to worthwhile civic causes, the goodwill generated as a result of these activities causes long-term increases in the firm's sales and cash flows, which translate into additional wealth for the firm's owners.

 

 

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