Question

I have been requested to carry out a journal review on the following:

" Explain what corporate goals provides the primary objective for the most financial decisions"

I tried to search in the university online library and found a few articles related to profit and shareholder wealth maximization but I don't seem to know how to approach this question actually through literature review. Appreciate some advise on how to start with this, thank you

Answer 1

Corporate goals are the targets, set to achieve in a specified time period so that corporate's mission can be achieved. Each and every company works for some or the other goals, some work for profit, some for not profit.

Corporate goals- These are as following:

1. Profit maximization- Profit maximization is the primary goal of corporate, companies work day and night for profit motive. They try to reduce cost so that profit can be maximized, they also make strategies to increase the revenues. This is a traditional concept.
2. Wealth maximization- This is a modern approach in which, corporate want to increase wealth of shareholders by giving them dividend out of the profits, by providing them capital appreciation, by repurchasing the shares from market so that per share value may increase and shareholders' worth may also increase.
3. Customers' satisfaction- This is also one of the main motives of corporate, customer is king and God, customer satisfaction is very important for business and for motivating the firms to produce more goods.
4. Expansion & Growth- All companies want to grow and expand, some companies reinvest their profits as retained earnings and use them for expansion purpose, some companies raise finance to grow and expand.
5. Sustainability- Companies want to sustain in this cut throat competitive era. In an industry, there are many players, if companies do not update and upgrade themselves and their products, they may be out of the market soon.

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