Maximisation of profit Article Example | Topics and Well Written Essays - 5500 words

Maximisation of profit - Article ExampleWhen small groups of people add up together and work on a project, they invariably have to analyze as to what their mission and goal are. Organizations are usually classifies into distinct types like universal sector (Central governments, state government run offices, schools, colleges, public welfare systems), private sectors (small business partnerships, limited companies, cooperatives, multinationals etc.), Quasi-Governmental arrangements, Organizations in the charitable sector and even the churches and trade unions sess be referred to as organizations. (N.Kumar, 1997) Hence, every organization issues a mission statement, which includes the purpose of setting up the organization. In social sciences, organizations are perceived from different dimensions. The familiar study of how an organization works is termed as organisational behavior or analysis. The whole of organizations behavior revolves only around one aspect-its goal. Every org anization should have, disregarding of the field it operates in, a distinct goal. (N.Kumar, 1997)A goal, not only gives them a direction of persuasion, but also gives the much required motivation to the employees to work towards it, thereby helping them achieve their potential along with the companys growth. Likewise, a conceived state of an organization in a stipulated amount of time is referred to as Vision. Vision is extremely crucial for an organization as it gives a glimpse of the state of the organization after a certain period of time to the employees and stakeholders. Vision can be taken as a benchmark for the companys performance in the future and can be used for comparison of various results recorded by the company. (Davenport Hines, 1990)Private-owned organizations usually have profit-maximization as their fix objective. (Susan Grant, 2000)However, many economists have different views over how an organizations objective should be formulated. Different people have come u p with different theories over the issue of organizational objective. Many of them clashed, many of them overlapped and new theories were born out of the overlapping theories, but a general consensus is achieved that profit-maximization should be the sole objective organization though another(prenominal) objectives cannot be safely put aside. In this dissertation, Id like to analyze the various theories put forward by economists and then draw a suitable death from the same. I will also be studying a few patterns of various industries by taking certain specific examples of how a few companies overcame different situations keeping in their minds profit-maximization as their sole-objective.Literature ReviewAs said above, it is imperative for an organization to identify its objectives before venturing and investing resources into the venture. So what is/are the goals a financial manager in a company will seek. In the first impulse, the only objective, which comes to, the mind, is prof it maximization. Any business enterprise aims at earning gain hence, it may be argued that profit maximization should be the sole objective of the organization. It is needless to say, that earning profits sustains the companys existence and can motivate the company to expand its grocery and