A Detailed Overview On Contradictory Objectives of a Firm


To understand the contradictory objectives of a firm, it is necessary to know what is the nature and purpose of a firm. Managing contradictory goals is not easy; it is a challenging task for the managers, and they can only perform well or do good for the business when they have the right goals in mind.

The Nature Of The Firm

A firm is an association of individuals who strive to organize themselves to turn inputs into outputs. A firm works on the factor of production to produce goods and services that fulfill the needs of consumers. Each firm has to lay down its own objectives that are fundamental to its existence and survival. The market is the most effective plan for firms to establish themselves; firms that are better at delivering each product or service for the lowest price make their place here easily. The market has a lot to offer the firms.

Objectives of a Firm

The Objectives Of A Firm

There are occasions when goals overlap. Growing market share can result in lower profit in the near term but allow profit maximization in the longer term.

The Main Objectives Of Firms Are

  1. To achieve the organizational goals
  2. To enhance the output of the firm
  3. To maximize the firm sales
  4. To increase the organization profit
  5. To increase the customer and stakeholders satisfaction
  6. To maximize shareholder’s return on investment
  7. To help an organization grow and expand

Contradictory objectives of a dissertation help firms are also sometimes confused with goal conflict. While both seem to be offering the same thing, they are not. Goal conflict is a business term that typically refers to either strategy or data plans that are made but cannot be effectively completed because of inherent differences and problems between goals.

It is necessary to understand that there are likely to be conflicts when it comes to competing goals. For some firms, the desire to increase their profits may conflict with several other goals, including sales maximization, sales revenue maximization, and ethical goals. These conflicts will become clear only when the main objectives are analyzed carefully by the managers.

Managing Contradictory Goals

Understanding contradictory goals is not easy. Sometimes managers end up jeopardizing or sacrificing one goal to achieve another. Managers are required to do what is best for the overall business even if it means that they will underachieve in one of their performance goals areas.

Objectives of a Firm 1
Firms involve thousands of people directly, with millions of people indirectly involved. Not all people directly or indirectly involved in an enterprise have the same goals or gain the same rewards. Entrepreneurs take business risks and expect to make a profit from their entrepreneurial skill and effort whereas managers, who are appointed by owners to make decisions work hard to take things in the right direction. These decisions do not always have to be easy or simple. They can be quite conflicting, but the main goal is to achieve the desired outcome in the end.

Profit maximization is the main goal for firms as they want to enjoy the highest possible profits. Profits are achieved when a firm’s revenue is greater than its production costs. Profit maximization has long been assumed to be the dominant goal of private enterprise, but this view seems to be changing with contradictory objectives which are not the same and need some working out.

Contradictory objectives can also be explained as the clash of two competing goals. It often happens that the achievement of one goal seems to be endangered by the achievement of the other goal. It becomes challenging for the managers to take the right decision or choose between the two goals as both of them are important for a firm and play a crucial role in increasing profits and expansion.

Managers everywhere continue to face the challenge of achieving conflicting goals. In a firm, the manager might be under pressure to increase revenue but reduce headcount, expand while becoming more efficient, and invest in customer relationships without losing sight of functional competencies. Responding to such challenges becomes very tough as these factors are related to each other and achieving one goal means leaving the other unfulfilled.

Mapping these challenges as competing for balancing loops, each with its own goal, can help managers better understand the tensions produced by these structures so they can come up with strategies to resolve them. Managers must understand the two competing-goals structures to managing the dynamics of running a firm successfully.

Managers often find themselves ceaselessly pulled between satisfying client expectations on individual country projects and participating in global communities of practice designed to enhance the profit margins and reach customers. They find themselves faced with the dilemma of seeing one of their responsibilities taking a lower priority than the other, even when both of them are equally important.

Contradictory goals manifest themselves in two ways. Firstly, the need to achieve two different goals at the same time puts pressure on the firm and the major to focus more on one task, while ignoring the second that affects performance relative to both these goals. Considering the improbability of satisfying both conditions at the same time, the managers usually end up achieving one goal at the expense of the other.

The manager of essay writing services says, In most cases, senior managers believe the best way to deal
with problems is to reduce headcount so that they can reduce the financial strain and get things back in shape. At the same time, they continue to send a message that the firm’s revenue generation goals must be met. They must understand that to fulfill their second goal of increasing the profits, they need more workers. With these contradictory objectives, firms often face problems in achieving their targets or they have to settle with what they have in hand.

Managing contradictory objectives is not an easy task as it results from conflicting-goals situations. Acknowledging these conflicts is the first step for managers to grasp how powerfully they can undermine their department’s success. With two explicit goals to achieve, managers must focus on the significance of each goal and test what affects the working and profits of the firm in the long as well as short term, and it will help them manage things better.

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