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Unformatted text preview: Banyei Isoh Dr. Shick 03/18/2010 Midterm Examination 1. What is a cost minimization strategy? Why do many organizations and individuals use a cost minimization strategy? How might the use of a cost minimization strategy by corporations and individuals promote corporate actions that may be detrimental first to individual well-being and then to societal well being? The cost minimization strategy is one that goes by the belief that, an individual or firm will seek to purchase a given amount of goods or inputs at the least cost, other things being equal. Many organizations and individuals use this strategy because they go by the belief that the least amount of input that they need to reach the greatest amount of output is what is most profitable. With this being said, individuals make up an organization, so when really looking at why many organizations incorporate this strategy, we must first look at the individuals running these organizations. Many of these same individuals who use the cost minimization strategy in their personal lives will do the same with the organization that they are in control of. By using the least amount of inputs to reach the greatest amount of outputs, organizations and individuals have more resources to chase an agenda that they feel is worth more. If not chasing an agenda that they feel is worth more to them, they are utilizing this strategy to keep more of their resources to themselves. The cost minimization strategy by corporations and individuals promotes actions that may be detrimental to the well being of an individual and society because many of these corporations are becoming involved in unethical behaviors to get the cost of their inputs to all time lows. By breaking the ethical barrier they put individuals at risk because they may be using a lesser quality of material that they are fully aware is not up to the quality of a previous material...
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This note was uploaded on 05/06/2010 for the course BUAD Buad 381 taught by Professor Proctor during the Spring '10 term at Morgan.
- Spring '10
- Business Law