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Other objectives

Profit maximisation is not the only objective of private firms. Other objectives include:

  • Survival
  • To make enough profit to satisfy the needs of the owners (satisficing)
  • To break-even
  • To maximise revenue
  • Growth
  • Improving market share

Objectives may be short-term as well as long-term. Short-term objectives, which are more tactical than strategic, might include:

  • Penetrating a market
  • Eliminating a competitor
  • Dumping unwanted products

State owned companies are often thought to be good because they are not profit maximisers. It is argued that they act 'in the public interest', avoid externalities, and minimise wasteful activities. However, this may not always be seen on examination of real nationalised corporations.