q problems of pursuing only profit objectives-


Q. Problems of pursuing only profit objectives?

- Conflict with other stakeholder goals for example customers will want a better service and not want to pay anymore, a better service may involve training costs for staff which would have to be paid for out of profits.

- Encourages short-term thinking by managers as they are only interested in increasing short term profits at the detriment of long term profitability and survival.

- Other non-financial measures are ignored which would give a better rounded assessment of an organisation. Examples would be customer feedback, customer complaints, employee turnover, market growth, reasons for faulty items.

- Not relevant to non-profit making organisations as their main aims are other things such as maximising profitability.

- There is a huge temptation to massage figures if only measurement used to reward managers is on the grounds of profit generation.

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Strategic Management: q problems of pursuing only profit objectives-
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