Strategic Management - Book Report/Review Example

Only on StudentShare

Extract of sample
Strategic Management

"The considertion of his own privte profit is the sole motive which determines the owner of ny cpitl to employ it either in griculture, in mnufctures, or in some prticulr brnch of the wholesle or retil trde." (Smith, 1965)
In the following pper I will discuss the theories of profit mximiztion tht rgue bout different pproches to the question. Discussion includes Bumol's theory of sles mximiztion, mngeril utility theory by Willimson nd the theory of stisficing introduced by Simon.
Sles mximistion under profit constrint does not men n ttempt to obtin the lrgest possible physicl volume (which is hrdly esy to define in the modern multi-product firm). Rther it refers to mximistion of totl revenue (dollr sles) which, to the businessmn, is the obvious mesure of the mount he hs sold. Mximum sles in this sense need not require very lrge physicl outputs. To tke n extreme cse, t zero price physicl volume my be high but
dollr sles volume will be zero. There will normlly be well determined output level which mximises dollr sles. This level cn ordinrily be fixed with the id of the well known rule tht mximum revenue will be ttined only t n output t which the elsticity of demnd is unity, i.e. t which mrginl revenue is zero. (Johnson, Scholes, 2006)
The essentils of Bumol's model cn most esily be exmined with the help of digrm showing totl cost nd totl revenue cu ...
Download paper


It hs been recognized t lest since dm Smith tht profits re the driving force in cpitlist economy. There re no stte plnners to issue directives concerning the productive use of the stte's resources. Hbit, though not without importnce, cnnot be held responsible for the production nd exchnge of goods…
Author : osvaldochamplin

Related Essays

Strategic Management Master Book Report/Review
12 pages (3012 words) Book Report/Review
Management Book Report/Review
4 pages (1004 words) Book Report/Review
Human Resource Management Book Report/Review
10 pages (2510 words) Book Report/Review
Knowledge Management Book Report/Review
4 pages (1004 words) Book Report/Review
Management Master Book Report/Review
8 pages (2008 words) Book Report/Review
Project Management Book Report/Review
6 pages (1506 words) Book Report/Review
Got a tricky question? Receive an answer from students like you! Try us!