Objectives business

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Key Point: There will always be a range of business objectives:

Profit maximisation (where MR=MC)

Revenue maximisation (sales revenue) – where MR=zero

Increasing and protecting market share

Surviving an economic downturn / recession

Pursuing ethical business objectives (corporate social responsibility)

Providing a public service – see later sections on nationalised (state-owned) industries

Why might firms not profit maximize?

Imperfect information: might be hard for business to pin point their profit maximizing output

Multi-product business: most businesses are Multi product firms operating in a range of markets so the volume of information they have to handle is vast

Behavioral theories of the firm:

In complex organisations there are various Stakeholders these include:

Managers employed by a business and other employees

Shareholders - people who have an equity stake in a business

Customers

The government and it's agencies including local government

None profit organisations:

Include charities, community organisations.

Examples: network Rail, oxfam

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