GoalsofaCompany.html.zip

Goals of a Company.html

Goals of a Company

What is the primary goal of a company? Is it profit? Business companies exist to earn profit, even though there are other goals. In most cases, if at least a normal profit is not earned, companies dissolve and owners place their wealth in investments that have the potential of giving them the desired returns. Managers need to consider various questions regarding the benefits and costs of a particular activity or investment before they make any decisions for the company.

Before making a decision for a company, managers must try to answer various questions that address long-term and short-term considerations. Your decision must address the following questions:

Will the particular activity benefit the company only in the short term?
Does this decision have an impact on the company’s success in the long term?
Will the particular activity have a negative impact in the short term and positive effects only in the long term?

Managers must also consider risk in the decision-making process. Two investments may show overwhelming profits. However, it is unwise to compare results of two investment possibilities with two different chances or probabilities of being realized.

So what should be the ultimate goal of a company? It is to maximize its value. In other words, the company should try to maximize profits and minimize risk to the owners. These are long-term goals of a company, as are most goals of any company, because companies rarely plan to exist for just a short duration.

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GoalsofaCompany.html.zip

Goals of a Company.html