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Day 30 – Q 4. Does having profit maximisation as the sole objective lead to unethical practices in the corporate world? Critically examine

4. Does having profit maximisation as the sole objective lead to unethical practices in the corporate world? Critically examine.

क्या कॉरपोरेट दुनिया में लाभ का एकमात्र उद्देश्य होना अनैतिक प्रथाओं को जन्म देता है? समालोचनात्मक जांच करें।


Corporate world functions on capitalistic principles which require profit maximization and hence was criticized during early times of Industrial revolution for being exploitative etc.


However, this is the best model till date where efficiency, innovation and effectiveness is key ingredients. Consequently, per worker productivity is highest and hence profit to company and hence better salary for the employees’. Thus corporate world brings happiness for all employees.

However, it can lead to slippery slope. In the quest of profit maximization often it turns exploitative. Workers are forced to work long beyond duty hours while bosses take the chunk. On the other hand, company under license for industry will try to pollute more and more.

For example: Volkswagen quoted wrong emission standards. Ranbaxy quoted wrong drug ingredients. Johnson sold wrongs prescription of hip replacement therapy affecting millions of consumers. Union Carbide undermined gas leakage safety regulations only leading to death of thousands in Bhopal.

Profit maximization as the sole objective of corporate world would be detrimental for the society and the nation through several ways-

1.It leads to crony capitalism, and nefarious act of colluding with the government machinery in which country’s political, and economic directions are dictated by the few.
2.Basic civic human rights of the subjects are being infringed upon. For instance, corporate operating in some informal sector pay no due rights to the interest and well-being of the workers.

3.When the haves pay no regards to the law of natural and re-distributive justice, inequalities bloom which hinders country’s socio-economic growth and development.
4.If such unfortunate system left unchecked, it could possibly leads to an eventual collapse of the economy, and even open doors to violent revolution and turmoil.
In order to realign profit maximization in tune with ethical standards. several steps can be taken.

5.Corporate social responsibility should be strictly enforced and efforts should be taken to increase the amount of taxation so that commercial responsibility towards the society could be channelized effectively.

6.Corporate governance should be emphasized so that there is scope for accountability and transparency in companies’ engagement with various stakeholders.

Suggestions for corporate and Government:

1.Strictly following laws.

2.Environment priority over materialistic gains.

3.Profit maximisation through credibility building.

4.Profit sharing and rewarding labours through eligible rights.

5.Charity works through cess.

6.Gains through healthy competition and innovation.


In this context profit maximization has led to sever unethical practices. Gandhi ji wanted for Corporate Citizenship and Policy based upon Trusteeship for corporate entities. Today many of corporate like TATAs are actively engaged into CSR and philanthropic activities

Best answer SAM

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