A normative purpose of business includes contributing to social well-being by doing what?

• A. Creating value for stakeholders while acting ethically, legally, and responsibly
• B. Maximizing executive compensation
• C. Reducing workforce
• D. Minimizing taxes

Answer: (A)

A business’s normative purpose is to contribute to social well-being by creating value for stakeholders while acting ethically, legally, and responsibly. This view treats profits as a means to support employees, customers, communities, suppliers, and the environment, not just as an end in itself. When a company operates with integrity and in compliance with laws, it builds trust, reduces harms, and supports sustainable growth, which together enhance social welfare.

Choosing actions that focus narrowly on personal gain for executives, reducing the workforce, or avoiding public contributions through taxes does not advance social well-being in the same way. Maximizing executive pay can widen inequities and erode morale; cutting jobs harms families and communities; and minimizing taxes can undercut the resources that society relies on for education, safety, and infrastructure. Therefore, the best fit is creating stakeholder value within ethical and legal boundaries.