Social Responsibilities of Business and Business Ethics · Class 11 · CBSE · Commerce Business Studies
An argument against social responsibility suggests that the primary objective of any business firm is to maximize profits for its owners. According t…
Practice question from Social Responsibilities of Business and Business Ethics (Class 11 · CBSE · Commerce Business Studies), with the correct answer and a step-by-step solution.
easy · MCQ · Q-A40182
An argument against social responsibility suggests that the primary objective of any business firm is to maximize profits for its owners. According to this view, spending company resources on social goals violates which fundamental principle?
- A.Profit maximization and fiduciary duty to shareholdersCorrect answer
- B.Environmental protection and sustainability
- C.Public image and brand enhancement
- D.Government regulation and compliance
Solution
The classical economic argument against social responsibility asserts that managers have a fiduciary responsibility to maximize profits for shareholders, and diverting funds to social causes imposes unfair costs on shareholders and customers.
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