According to the Theory of the Firm, the Management's Ultimate

question 29

Multiple Choice

According to the theory of the firm, the management's ultimate objective is to:

• A) maximize short-term profit, even if this sacrifices long-term profit.
• B) maximize the value of the firm.
• C) increase production to the highest possible level.
• D) increase the market share of the firm.
• E) diversify into as many product lines as the firm can.

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Definitions:

Learning Organization

An organization that prioritizes the continuous learning and development of its members to adapt and innovate.

Open-System Model

A business or organizational approach that focuses on external interactions, recognizing the dynamic exchange between the organization and its environment.

Organizational Life Cycle

The progression through which an organization evolves over time, typically consisting of stages such as startup, growth, maturity, and decline.

Equifinality

The concept that in open systems, a given end state can be reached by many potential means, indicating multiple paths to achieve the same goal.