Changing Objectives of Firms and Managerial Preferences: A Review of Models in Microeconomics

B Pradeep Kumar
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B Pradeep Kumar: Government Arts & Science College, Ambalapuzha

Shanlax International Journal of Management, 2021, vol. 8, issue 4, 43-46

Abstract: Theoretically, producer behavior models postulate that firms have had different objectives ranging from profit maximization to setting aspirational levels. The assumption of the objective of profit maximization was shaped based on the rationality principles, which has lost relevance with the coming of the principle of behavioral economics in recent time. The present paper intends to throw some light on changes that have been made in the objective of firms over years and attempts to review some models emphasizing managerial utility as the core objective of firms.

Keywords: Profit maximization; Sales maximization; Managerial utility function; Managerial discretionary powers; Slacks and salaries; Behavioral economics (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:acg:managt:v:8:y:2021:i:4:p:43-46

DOI: 10.34293/management.v8i4.3816

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