PROFIT MAKING ISN'T JUST THE ONLY BUSINESS OBJECTIVE
In the past people have believed that making profit was the only criterial for venturing into any form and type of business in the economic world. But as the world kept evolving Authorities like Hugo Simon, William Baumol,Oliver Williamson amongst others have being able to research and have discovered that there are actually other alternative objectives in business apart from profit maximisation few of which we shall be briefly discussing in this particular article .
* SATISFICING OBJECTIVE: this was postulated by Hugo Simon. It preaches deviation from the normal objective of business in that it talks about setting down minimum target by the firm or business involved in terms of achieving minimum revenue and profit since the cost and knowledge for achieving the profit maximisation is high than the business can bear.
*SALES REVENUE MAXIMIZATION: this was advocated by William Baumol it advocates the fact that sales revenue correlates better with salaries and at such is more efficient than profit maximisation in determining business objective. Revenue is usually maximised at MR=0 i.e marginal revenue equal zero. Banks forinstance are more interested in this than profit maximisation
* MANAGERIAL UTILITY MODEL: postulated by Oliver Williamson(1981) and its all about the setting of objectives and achieving them by a business' management like, success in raising a firm's sales revenue, market share or meeting an output growth target
These are the major other objectives exibited by behavioural Economists and some business gurus but there are other minors like providing public services and surviving economic downturn or recession amongst others.
Therefore it would be inapproriate and unprofessional to say that MR=MC is the only objective for setting up a business.
* SATISFICING OBJECTIVE: this was postulated by Hugo Simon. It preaches deviation from the normal objective of business in that it talks about setting down minimum target by the firm or business involved in terms of achieving minimum revenue and profit since the cost and knowledge for achieving the profit maximisation is high than the business can bear.
*SALES REVENUE MAXIMIZATION: this was advocated by William Baumol it advocates the fact that sales revenue correlates better with salaries and at such is more efficient than profit maximisation in determining business objective. Revenue is usually maximised at MR=0 i.e marginal revenue equal zero. Banks forinstance are more interested in this than profit maximisation
* MANAGERIAL UTILITY MODEL: postulated by Oliver Williamson(1981) and its all about the setting of objectives and achieving them by a business' management like, success in raising a firm's sales revenue, market share or meeting an output growth target
These are the major other objectives exibited by behavioural Economists and some business gurus but there are other minors like providing public services and surviving economic downturn or recession amongst others.
Therefore it would be inapproriate and unprofessional to say that MR=MC is the only objective for setting up a business.
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