Milton Friedman argued that managers should try to maximize profit. Does his view conflict with the actions taken by senior executives of McDonald's to use corporate resources to support Ronald McDonald House projects? Explain. The actions of senior McDonald's executives to support Ronald McDonald House projects A. maximize profits if related media exposure is more effective than advertising. B. do not maximize profits because they have no effect on consumer demand. C. maximize profits if consumers are not charged higher prices to pay for the projects. D. do not maximize profits and give the company a bad reputation for wasting resources. E. do not affect profits because shareholders otherwise would have supported such projects.

Option A

Explanation:

Yes, managers need to maximize profits.

However, various plans of action are utilized by managers to maximize profits. There is no standard plan of action to achieve this goal.

When senior executives of McDonald's use corporate resources to support Ronald McDonald House Projects then such action on their part does not conflict with a profit-maximization goal.

Contrariwise, this action is a step towards achieving the goal of profit-maximization. This is because the support of such generous ventures creates a positive image of McDonald's in the sight of consumers.

This positive image and favorable impression enable McDonald's to attract more customers since people always prefer to make use of services or consume products of a socially-responsible company.

Hence, the utility of corporate resources by senior executives to support Ronald McDonald House projects is fulfilling the corporate social responsibility of McDonald's and thus enhancing the image of McDonald's in the sight of consumers.

This positive image will lead to more treads (as people prefer socially-responsible organizations) and more sales for McDonald's which will enable McDonald's to maximize its profit.

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