Relevance and implication of business objectives models in terms of Nepalese enterprise. Ans: In much of economic theory, it is assumed that a business aims to maximise profits.In reality, most businesses which are run for “commercial gain” do have profit maximisation as an important objective – since the shareholders have taken a risk investing in the business and require a return (profit) to compensate them for their risk. Profit maximization is the process by which a firm determines the price and out put level that returns the greatest profit. In the context of nepalese enterprises , most of the firm aim for profit maximization model.most of the business are profit oriented business try to maximise profit are the business who enjoy monopoly market. Nepal lever limited, Nepal telecom are few business who follow profit maximisation model. They tend to increase their profit by increase the price of the product rather than increasing the sales whenver there is increase in cost of production. Sales maximisation theory This model argues that businesses try to maximise sales or revenues rather than profits. There are several possible motives for such an objective ,they are * Grow or sustain market share
* Ensure survival
* Discourage competition specially new entrants
* Cover larger market
In the context of Nepal, sales maximisation model is followed by the business which has stiff competition in the market.coco-cola and pepsi-cola ,they both are two big companies which sells similar kind of product and has similar product price. So these company try to maximise sells to earn profit . they tend to cover huge market and try beat their competitor interms of sales. Olive Williamson’s model of managerial discretion In this model, Williamson argues that management act to further their own interests – in other words to achieve personal utility rather than to meet the interests of outside investors. Businesses run with...
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