2.4.3 (HL)—Business objectives

Businesses may pursue profit maximisation, revenue growth, market share, survival, social or environmental goals; the objective shapes decisions and trade-offs.

Objectives can conflict across time and stakeholders. A firm may accept lower short-run profit to build capacity or meet a social mission.

State the objective, time horizon and constraint before evaluating a decision.

A start-up prioritises survival and cash flow over current profit while building a customer base.

“Businesses maximise profit” is a model assumption, not a universal fact.

Profit maximization selects the output or strategy expected to generate the greatest profit. Alternatives change the decision rule: corporate social responsibility considers social and environmental stakeholders; market-share objectives prioritize sales relative to rivals; satisficing seeks an acceptable rather than maximum outcome under constraints; growth expands scale or reach. A firm can combine objectives, but conflicts require an explicit priority and time horizon.