Goals of the firm/corporation

 

Goals of the firm/corporation 

 

Goals of the firm means what want to achieve the firm in the future that is goals of the firm. There are many types of goals of organization according to their types and working method. But the two main goals are common of whole profit organizations. The first is profit maximizing objective and second is wealth maximization objective. Both types of objectives are given below in details. 

 

i. Profit maximizing objective 

 profit maximization objective is a one of most important objectives for all business firm. Without profit we cannot operate any business to long term. Because the company paid their whole expenses from profit. If the company earn more profit, then the company paid their whole expenditure easily, and can expanse the business. Shareholders and government also can receive more dividend and taxes. From the maximizing of profit the life of the company increases to long term and can produce the qualities of products, and can increase the market area. From the maximizing of profit, firm can expanse of whole business. If company earn more profit, then the company can do every activity easily. So, profit maximizing objective/goal is most Important objective of a corporation. 

 The top-level of management should purchase or invest in profitable sector/ project which give profit long-term and profit be increasable also. The project/Assets which cannot give profit long term or the profit decreases day to day then that project should not be accepted from management. 

 In the conclusions, profit maximizing objective is a most important objective for an organization because if the organization can earn more profit, then all is well. Therefore, this objective how can organization achieve for that should make different best plan and strategy. 

 

ii. Wealth maximization objective 

 Wealth maximization objective is also one of most important objectives of the firm. In this objective manager try to increase the value of shares or Net present value. Net present value means the present value of future incomes from a project minus present value of project cost. IF Net present value is positive then that is maximize of wealth. In this way if net present is negative then that is minimize of wealth. We can say that wealth maximization means maximization of value of shares in the market. When the project is profitable then the wealth is maximized but if our project is not profitable then our wealth is minimized. Therefore, the manager should select the best project for investment which can give best profit in the future and that profit should be growing trend every year. For this manager make a best achievement objective of wealth maximization.