LALA LAJPATRAI COLLEGE

SUBJECT TO MANAGERIAL ECONOMICS

SUBMITTED TO PROF.MOHANA SUBMITTED BY GROUP 4 FYBMS C SEMESTER 2

OBJECTIVES OF THE FIRM

MAXIMISATION SALES MAXIMISATION UTILITY MAXIMISATION LONG RUN SURVIVAL CUSTOMER SATISFACTION STAFF MAXIMISATION GROWT H MAXIMISATION
PROFIT

PROFIT MAXIMISATION
THEORY

GIVEN BY WALRAS ,JEVONS, MARSHALL.

IT

IS ONE OF THE BASIC OBJECTIVES. IT IS CONSIDERED AS THE RATIONAL BEHAVIOUR OF THE FIRM AS UTILITY MAXIMIZATION BY THE CONSUMER.

PROFIT MAXIMISATION GRAPH

SALES MAXIMISATION

MANAGERIAL REWARDS ARE A FUNCTION OF TOTAL SALES AND NOT TOTAL PROFIT. MANAGERS ARE BY NATURE UPWARDLY MOBILE AND TO FACILITATE UPWARD MOBILITY BUSINESS EXPANSION IS NECESSARY. BUSINESS EXPANSION MEANS CAPTURING NEWER MARKETS AND ENJOYING A LARGER MARKET SHARE AND REPUTITION. - BY PROF.BAUMOL

SALES MAXIMISATION GRAPH

WILLIAMSONS THEORY OF MANAGERIAL UTILITY MAXIMISATION

BAUMOLS MODEL VEW

THAT MANAGERS NTERESTS ARE TED TO A SNGLE VARABLE: SALES REVENUE. ARGUED THAT SEVERAL VARABLES SHOULD BE N THE MANAGERS UTLTY FUNCTON.

WLLAMSON (1963)

UTILITY MAXIMIZATION GRAPH

LONG RUN SURVIVAL

INDIVIDUAL FIRMS FACE A LOT OF COMPETITION AS A RESULT THEIR GOAL IS TO OBTAIN SECURE PROFITS OR MAXIMUM LONG RUN PROFITS . IS THE LONG TERM GOAL OF ANY BUSINESS FIRM AND HENCE REASONABLE NORMAL PROFIT IS MORE DESIRABLE. - PROF. PETER DRUCKER

SURVIVAL

CUSTOMER SATISFACTION
MANAGERS

OF CORPORATE FIRMS AIM TO OBTAIN SATISFACTORY RATE OF PROFITS . DETERMINES AN ASPIRATION LEVEL ON THE BASIS OF ITS PAST EXPERIENCES IF THE ASPIRATION LEVEL IS ACHIEVED WITHOUT ANY DIFFICULTY IT IS REVISED FOR FUTURE OPERATIONS. - PROF. SIMON

MANAGEMENT

STAFF MAXIMISATION
MODERN PROFESSIONAL MANAGERS

WORKING IN CORPORATE FIRMS OFTEN COMPROMISE, ON PROFIT MAXIMISATION AND TRY TO MAXIMISE MANAGERIAL SATISFACTION.
MANAGERIAL UTILITY IN

THE CONTEXT OF THE THEORY OF STAFF MAXIMISATION IS DIRECTLY RELATED TO THE SIZE OF THE STAFF.

STAFF MAXIMISATION GRAPH

MARRISS THEORY OF GROWTH MAXIMISATION

Baumol

(1962); Marris (1964) and Williamson (1963) suggest that managers may pursue a strategy of maximum growth of the firm Strategy of max. Growth of firm :Max. Growth at the expense of firms future profit streams. Managers strive for growth rather than profit max. Growth of demand => advertising expenditures; further price reductions; extensive advertisements May be harmful due to: Managerial constraint on growth Financial constraint on growth

EFFORTS BY
NAMES

ROLL NO.
231 234 247 255 260 271

CHITRA SHETTY SUPRIYA DAREKAR SHRADHA RANE ISHITA TANNA MANALI DALVI HETAL JAIN