Profit maximization shouldn’t overshadow shareholder wealth maximization as many a times decisions taken to maximize profits of the owner has a short term view and in the long term erodes the value of shareholder wealth. It would be inappropriate to concentrate efforts on maximizing accounting profit when this objective does not consider one of the key determinants of shareholder wealth. Maximizing profits by minimizing service and integrity can lead to business problems that eventually sink a business, as shortcuts and bad pr cause customers and employees to leave. Profit maximization is an objective of a firm, but its not the only objective a firm will have different long term and short term goals which will vary depending on the curre nt business cycle if you need a more specific answer, please ask a more specific question.
Profit maximisation is not the sole objective of business essay sample profit maximisation has been one of the main aims of the firms the generally accepted view is the long run will wish to maximize profit. Profit maximisation is not the sole objective of business a business might depart from pure profit maximisation objectives for a number of reasons some relate to the lack of detailed and precise information, nepal telecom are few business who follow profit maximisation model. Maximizing profit and sales are two major concerns of business owners, but many business managers fail to realize that sales maximization does not always mean profit maximization ignorance of the features, differences and cause-and-effect relationship between these two objectives can give you a false sense of improving profitability. Business organisations exists for profit making, there is no second thought about it, but it cannot be the sole criteria for its existence in a developing nation.
Answer / vipin bhardwaj the business having sole objective of profit maximisation does not think about customer satisfactoin and its social responsibiltiesit blindly goes for making big profit and. The sole aim of earning profit has the following while the importance of profits cannot be ignored, earning profit cannot be the only objective of the business it has to achieve other economic and social objectives too the sole aim of earning profit has the following effects on a business : ignores the interest of workers : labour is one. Profit maximization is the most important objective of a business entity every business, in addition to striving for the attainment of other objectives, does its best with special importance to. The most important business objective is profit maximisation and nothing else said the representative of the village headman therefore, the business should strive to make profits at all costs without worrying about anything else. Long run profit maximisation in some cases, firms may sacrifice profits in the short term to increase profits in the long run for example, by investing heavily in new capacity, firms may make a loss in the short run but enable higher profits in the future.
For a business, it is not necessary that profit should be the sole objective it may concentrate on various other aspects like increasing sales, capturing more market share etc, which will take care of profitability. Profit maximisation has been one of the main aims of the firms the generally accepted view is the long run will wish to maximize profit marginal cost and marginal revenue can be used to find the profit maximising level of output. Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders profit satisficing – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.
Agreeing to realistic goals is the first lesson a fledgling business should learn realistic goals should form the backbone of your company and are the most important part of your annual business plan. The sole aim of earning profit has the following effects on a business : ignores the interest of workers : labour is one of the most important factors of production profit maximization by-passes the interest of workers in the way that they do not get fair remuneration and hence are not motivated. As has been mentioned above, profit maximization is the most important objective of a business entity as it helps to run a business smoothly and successfully and survive continuously while making profits and staying solvent at the same time as providing various benefits. The main objective of the business is to earn profit some people feel that earning of profit should be the main objective of the business and others are against it because they feel that maximization of profit should be the sole objective of business enterprise.
Profit maximization basic objective of firm a firm's main objective should be to make decisions that maximize the value of the company for its owners, and as the owners of a company are its shareholders, the main financial objective should be 'the maximization of shareholder wealth. Each alternative, therefore, is to be seen as to whether or not it gives maximum profithowever, profit maximisation cannot be the sole objective of a company it is at best a limited objective if profit is given undue importance, a number of problems can arise. Profit maximisation objective does not take cognizance of this vital factor and treats all benefits, irrespective of the timing, as equally valuable (c) it ignores risk factor another serious shortcoming of the profit maximisation objective is that it overlooks risk factor. Profit maximisation is the main objective of a firm discuss this statement with the help of an example can profit be the sole objective of the business yes, it can, but expect that business to be short lived or their business will fail, but profit is not everything.