Answer to Question #43108 in Management for Pragash

Question

Why is it important to state a managerial objective? Could the assumption that manager’s objective is profit maximization be useful even if their real objective is maximizing market share (or) their salaries?

Answer 1

Setting objectives is an important part of a manager’s job. Examples of various objectives can help a manager create goals of his own. Money drives the business and its employees. An employee’s goals may not always coincide with the company’s objectives, however. Management by objective is a management style that seeks to use objectives and goals in a way that aligns employee and business objectives into a cohesive system.

The assumption that manager’s objective is profit maximization could be useful even if the real objective is maximizing market share or salaries, because if the profit is maximized, there will be more money resources to increase and then maximize the market share or salaries.