Critique- of the Profit Maximizing Theory

Considerable controversy has developed about the realism of the assumption of goal of profit maximization. Advocates of alternative theories argue that in real world, firms pursue other goals such as- revenue maximisation, sales maximisation, size maximisation, maximisation of utility function, and satisfying behaviour. Further, the assumption of perfect knowledge of the market conditions has been criticized on the ground that in real world, business firms function under uncertainty. They do not have knowledge of the demand and cost conditions.

Despite these limitations, traditional economists have defended the theory of profit maximisation on various grounds. Profit maximisation seems to be the basic objective of all business firms. The assumption has been found to predict behaviour of firms accurately says, Friedman. There is no other theory of firm that is generally acceptable.

传统理论没有区分所有者和经理。替代理论，即管理和行为理论与管理分开的所有权。结果，大型公司的管理人员努力最大化其效用，而不是最大化利润。

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