Question

If a business uses the economic model, it operates under the belief that, as part of its role, the business owes its existence to improving the society in which it operates. Explain the key principles and responsibilities associated with the economic model of business, and discuss how this perspective contrasts with other models of business operation.

Answer 1

The economic model of business operates under the belief that businesses owe their existence to improving society. This perspective emphasizes social responsibility, sustainable practices, ethical behavior, and community engagement. It contrasts with profit-maximization models.

Step-by-step explanation:

The economic model of business operates under the belief that a business owes its existence to improving the society in which it operates. This perspective is characterized by several key principles and responsibilities:

1. Social Responsibility: Businesses have an obligation to contribute positively to society and address social issues.
2. Sustainable Practices: Businesses should adopt environmentally sustainable practices to minimize their impact on the environment.
3. Ethical Behavior: Businesses should act ethically and uphold high standards of moral conduct in their operations.
4. Community Engagement: Businesses should actively engage with their local communities and support initiatives that benefit society.

This perspective contrasts with other models of business operation, such as the profit-maximization model, which focuses solely on maximizing profits without necessarily considering societal impact. The economic model places greater emphasis on the role of businesses as responsible agents in the community.