Why profit maximization is not an appropriate goal of the firm?

Why profit maximization is not an appropriate goal of the firm?
I'd like to start off by saying that the question is grammatically incorrect. If the question were "Why is profit maximization not an appropriate goal of the firm?" then my answer would most likely be centred around the fact that a firm cannot survive with mere profit maximisation, but must increase long-term security through investment and meeting shareholder expectations. This will increase their productive capacity for the furture as well as encourage the risky capital investment of the shareholders. If your question was 'Why is profit maximisation not the most important goal of the firm?" I would have to disagree with you, as it is the forerunner goal of nearly every term, excluding gov. firms, Australian banks and charities.
A'iiChà Crààzy
+ 11 others found this useful
Thanks for the feedback!

Why is shareholder wwealth maximization be a beter operating goal than profit maximization?

  A firm's operating goal should be to maximize shareholder wealth as it is shareholders who are the owners of the firm. Profit maximizing however is more of a personal/ma (MORE)

How is the goal of profit maximization affected by ethical considerations?

As a goal "profit maximization" alone is too simple to be meaningful.    All goals are filtered by our values. If someone is driven by greed alone then ethics may not be (MORE)

Why maximizing shareholers' wealth is always the goal of a firm instead of maximizing profits of the firm's?

The foundation of a firm is the investment, the wealth of its promoters and more importantly the share holders. Share holders have invested their money in the firm basing on t (MORE)

The Best Music PR Companies

Hiring a music public relations company is highly beneficial to small name bands and artists. Before hiring a music PR company, look for its previous experience and credential (MORE)

The Largest Political PR Firms in Washington, D.C.

Political public relations or political PR firms are organizations that specialize in the spread of information between political parties and the public. The aim of these firm (MORE)

A Comparative Look at Public Relations and Advertising

Public relations (PR) and advertising is a division of business marketing. Marketing is a critical business function that attracts consumers and effectively communicates the v (MORE)

In History

Strangest Bills Submitted to the House of Representatives

Making the high five the official greeting for the state of Missouri is the goal of Democratic representative Courtney Allen Curtis. He believes that the greeting will create (MORE)

Do non profitable projects contradict the goal of profit maximization of shareholder wealth?

Although it may appear as a bad idea to invest in non-profitable projects (e.g. those with a negative net present value), companies often invest in them nonetheless as a strat (MORE)

Is profit of wealth maximization an appropriate goal of corporations?

Wealth maximization is the appropriate objective of an enterprise. When the firm maximizes the stockholder's wealth, the individual stockholder can use this wealth to maximiz (MORE)

What are the situations when the profit maximization inconsistent with firm value maximization?

It is fairly easy to make short-term profits at the expense of long-term value creation.  Milk the company. Some examples:- Make lots of short term sales by lowering pric (MORE)