Introduction
Generally, economics is viewed as a scientific field that concerns the economic relationships between people and the way of enhancing the profitability of organizations. Economics is the study of how people, organizations, governments, and communities allocate resources. Economics refers to human activities, with the idea that persons act rationally, seeking the highest amount of benefit or usefulness. Economics is far more than profit maximization since one of the keys to success is focusing on people and inspiring them to achieve organizational goals through a defined plan.
Main body
Society has paid more attention to sustainable production, which does not align with the profit maximization approach and requires companies to invest in better production methods and supply chains. Sustainable production does not align with the approach of profit maximization, yet many companies, including clothing manufacturers, food production businesses, and electronics companies, invest in implementing sustainable practices. Modern companies restructure their workflow to address the concerns of their buyers. Haleem et al. (2021) describe the pressure from stakeholders that push companies towards investing in better means of production. The article by Haleem et al. (2021) supports the idea of economics being beyond profit maximization since the authors examine the impact of stakeholder pressure on the strategies of businesses. Economics focuses on studying aspects that are beyond the administrative processes that help a business achieve maximum profits. If the focus of economics was solely on enhancing profits, this field would not have studies related to human behavior and how psychology affects the economic decisions of people. According to Rodnick (2012), “if economics were only about profit maximization, it would be just another name for business administration. It is a social discipline, and society has other means of cost accounting besides market prices” (p. 11). The book by Rodnick (2012) supports the claim since the author presents the various elements of interest that economic scientists study, such as human behavior, motivation, and ways of inspiring people to achieve the targets. Behavioral economics is one example of how this science aims to study the specifics of actions connected to economic relationships. The evidence is the article by Gal (2018) explaining why behavioral economics has become so popular in the recent years and describing the specific interest of scholars who work in this field. Gal (2018) offers an explanation of behavioral economics in the following manner: “a way to make economics more accurate by incorporating more realistic assumptions about how humans behave” (para. 2).
Conclusion
In summary, economics is beyond profit maximization since there are many factors besides enhancing the efficiency of production that affect businesses and their leaders. Economics is significantly more than merely increasing profits as one of the keys to success is concentrating on people and encouraging them to reach corporate goals through a clear strategy. For future managers and organization leaders, it is important to understand that economics is more than earnings maximization to be able to achieve the goals of their organizations. Economists should pay more attention to the aspects of economics that are beyond profit maximization since the focus of this field should be on the effective management of people and helping organizations reach their strategic goals.
Alternative viewpoint
An alternative point of view is that there are other scientific fields that are concerned with inspiring employees and helping organizations reach their goals. Nieva (2020) focuses on addressing the issue of management as a field of study that concerns factors such as behaviors of people, motivation, inspiration, and others, which were discussed previously as part of economics. Managerial science only focuses on the issue of employee productivity, as opposed to economics, which focuses on the psychology and behaviors of consumers, community members, and other stakeholders. Thus, managerial sciences do not help people answer all the questions as opposed to economics.
References
Haleem, F. Farooq, S. Cheng, Y., Waehrens, B.V. (2022). Sustainable management practices and stakeholder pressure: A systematic literature review. Sustainability, 14, 1967. doi:10.3390/su14041967
Gal, D. (2018). Why is behavioral economics so popular? The New York Times.
Neiva, E. R., Macambira, M. O., & Ribeiro, E. M. B. A. (2020). Management practices, well-being and supportive behavior. Revista de Administração Mackenzie, 21(1), 1–27.
Rodnick, D. (2012). The globalization paradox: Democracy and the future of the world economy. W. W. Norton & Company.