“Profit is not an objective but a requirement of business.” Do you agree with this statement? Give reasons to support your answer.
Earning profits is one of the main objectives of business. However, it can be said that profit is not just an objective rather a requirement of business. A ceratin amount of profits is required by the business for its survival and growth. For instance, the profits are required to safeguard against and cover the varous risks that are involved in the business. Similarly, profits are reuired to remunerate the varous factors of production (such as labour, land, etc.) that are involved in the functioning of the business. Moreover, profits help in the attainment of various other objectioves of business as well (such as building market reputation, innovation, etc.)
There are certain business organisations known as Non-Profit Organisations. Although their main objective is not the earning of profits but such organisations also require certain amount of profits for their survival.