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Changing Objectives of Firms and Managerial Preferences: A Review of Models in Microeconomics

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  • B Pradeep Kumar

    (Government Arts & Science College, Ambalapuzha)

Abstract

Theoretically, producer behavior models postulate that firms have had different objectives ranging from profit maximization to setting aspirational levels. The assumption of the objective of profit maximization was shaped based on the rationality principles, which has lost relevance with the coming of the principle of behavioral economics in recent time. The present paper intends to throw some light on changes that have been made in the objective of firms over years and attempts to review some models emphasizing managerial utility as the core objective of firms.

Suggested Citation

  • B Pradeep Kumar, 2021. "Changing Objectives of Firms and Managerial Preferences: A Review of Models in Microeconomics," Shanlax International Journal of Management, Shanlax Journals, vol. 8(4), pages 43-46, April.
    • Handle: RePEc:acg:managt:v:8:y:2021:i:4:p:43-46
    DOI: 10.34293/management.v8i4.3816
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    References listed on IDEAS

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    1. Yarrow, G K, 1973. "Managerial Utility Maximization under Uncertainty," Economica, London School of Economics and Political Science, vol. 40(158), pages 155-173, May.
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    4. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
    5. Edwards, Franklin R, 1977. "Managerial Objectives in Regulated Industries: Expense-Preference Behavior in Banking," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 147-162, February.
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