Introduction: Corporations and businesses have a responsibility to more than just owners and shareholders. They have a responsibility to their consumers, the environment, employees, the communities in which they work, and society as a whole. For some, responsibility is a part of their corporate culture. Others find it a bit more difficult to put anything ahead of profits and the bottom line. No one is under the impression that most businesses exist for any other reason than to make to money; however, many are beginning to claim profits are important enough to shirk their corporate social responsibility. Is economic theory being used to cover up corporate greed? The cases of the Volkswagen diesel engine scandal and tainted peanut butter may be proof that the issue is more personal than corporate.
Profit Maximization Defined: According to Barnes, Dworkin, and Richards (55), profit maximization is an economic theory based on the laissez-faire theory of capitalism. Profit maximization focuses on making business decisions that maximize profits for the owner or organization. Profit maximization is a long-term business strategy used by many businesses; entire business cultures are a result of the
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Cheat devices were found in nearly five hundred thousand (500,000) automobiles delivered for sale in the United States. It was later determined that the device was actually placed in nearly eleven (11) million automobiles around the world (Hotten). The device was actually software code installed in the cars which recognized the lab testing conditions of the emission system. The software switched the car into a safe operating mode during testing which caused the car to run below normal power and performance and produce lower emissions. Inspectors now believe the tests showed up to forty times fewer pollutants during the test than in actual road usage