3.2.1 business objectives Flashcards
who are influencers of the firm?
- owners
- shareholders
- directors/managers
- workers
- consumers
what are shareholders objectivies?
looking to maximise firm profits
what are directors/managers objectives?
- increase in sales bonus
- maximising revenue
- increasing company size–> boosting their prestige
what are workers objectives?
- highr wags
- job security
- improved working conditions
what are consumer objectives?
- lower prices
- better customer service and quality
- social and enviromental causes
what is sales maximisation?
when price= ATC, but no losses are made but sales are maximised
No super normal profit made
where is revenue maximisation?
when MR = 0, no more additional revnue to be made
managers/ directors would rather revenue maximise, increasing market sha
what is profit satisficing?
when a firm makes nough profit to satisfy its influencers, but then pursues other objectives (social, enviromental, personal)
Why may firms wish to sale maximise?
An objective of directors/ managers to get a larger bonus.
Will mean super low prices for consumers hooking them in (eg Sony selling PS5 at super low price but charging really high prices for games )
Why may firms wish to revenue maximise?
To increase market share, increasing prestige
