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How societys interests can affect financial managers

Describe how society's interests can affect financial managers.

Sometimes the interests of any business firm's owners are not the similar as the interests of society. For example, the cost of correctly disposing of toxic waste can be so high which companies may be tempted to merely dump their waste in close to rivers. In so doing, the companies can keep profits high and costs low, and drive their stock prices higher (if they are not caught). Though, several people suffer from the polluted environment. This is why we have environmental and other alike laws:  therefore that society's best interests take precedence over the interests of specific company owners.

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

 

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