Not without reason a few centuries ago, at the birth economic theory as a science, developed the concept of behavior of the company. Time has passed, but they are still relevant, since the goal of doing business is always the same - making a profit.

A little about the company

If we make a short digression into history, then initially the word "company" meant distinctive name the owner of a store. But progress did not stand still, manufactories developed.

We will consider each of the presented ones separately in the context of their varieties and features.

Institutional Theory of the Firm

I would like to return to the times when microeconomics was born as a science in general, which is actively used to this day. It was then that the neoclassical theory of the firm, which is one of the components of the institutional one, originated. Why have several centuries passed, progress has outgrown itself several times, and this direction still has its adherents?

The fact is that the neoclassical theory of the firm, like no other, has a mathematical background, supported by a mass of formulas and calculations. It contains quite a lot of information on how to analyze changes. external factors that directly affect the activities of a business entity. And finally imperfect competition- the phenomenon is now quite common, and neoclassicism considers such conditions for doing business in the most detail.

Traditional theories

The theory of the firm in the traditional aspect is aimed at direct profit maximization, as noted above. Since every owner strives for this, this direction is still actively used in business activities. Most traditional theory useful in its teaching under the following conditions:

• if the company is large enough, has branches or subsidiaries, so the isolated results of activities are poorly controlled;
• competition is very intense, sometimes even too much;
• high dynamics of prices for raw materials, and subsequently for finished products;
• if the entrepreneur looks at the ways of implementing activities, and not at the end result.

But if none of the above conditions are met, then it is advisable to focus on end results, because with proper management, the company is not in danger.

managerial theory

Another interesting theory of the firm, which I would like to dwell on in more detail, is managerial. She, as you already understood from the name, explains the qualitative and effective management which brings good results.

This concept is based on the following premises:

• operating activities are managed by high-class managers of a narrow focus, who are much more oriented in this than the owners;
• as a rule, such management is aimed at increasing sales, which will subsequently lead to maximization of net profit.

The prerequisites really deserve the right to exist. Since, in connection with the current trend aimed at increasing the number of corporations, you should not rely on owners, because in fact they are just holders of authorized funds and not always good managers.

behavioral theory

Since we are talking about corporate associations, we should not forget about the variety of goals that each theory of firm behavior includes.

It must be taken into account that each commercial organization is, first of all, a team that strives for a common goal, which together gives rise to a number of principles:

• the working class is always interested in raising their own wages;
• junior office staff, in addition to a good salary, also strives for professional development and career growth;
• managers want more power, increased status and their importance to the company;
• shareholders are interested in high dividends;
• the owner is worried about financial stability companies.

In order for the company to exist without conflict, the holder of the authorized capital, as a strategic manager, must take into account the private interests of employees, which, in turn, must coincide with the interests of the company.

Due to the firm focus on profit, the desire of firms to maximize profits is taken for granted. Most theories of the firm not only postulate that profit is some goal or the main objective, but they unanimously claim that the well-defined goal is to extract maximum profit and that firms can be viewed as if they were seeking to maximize profits. Although it would be an exaggeration to consider profit maximization as an indicator that any actions and decisions of the form are subject to cold calculation in order to obtain the maximum excess of income over costs, maximization implies that, choosing from several alternatives with different expected profits, the firm will still choose the option with highest expected profit.

It is safe to say that profit is the goal of almost every firm - perhaps the dominant goal. Profits are a universal measure of business performance and few firms can take actions that will definitely lead to profits lower than they could be. long term. Some firms are more profit-oriented, while others are less so. In general, firms that are subject to strong competitive pressure tend to pursue profit maximization goals in the short run; if the profits of the firm are large enough to satisfy the shareholders, then such a firm behaves somewhat differently, allowing us to conclude that in addition to the profit maximization factor, on management decisions other factors also influence.

This is due to several reasons. In a harsh environment market competition When profit margins are low, dangers are high, and firms' ability to recover losses is low, there is a fierce struggle in which only the fittest survive. Market forces leave little room for arbitrary action. Under these conditions, it is quite difficult to earn even a normal profit, and the firm's decisions are most subject to short-term considerations. Most likely, those actions will be chosen that are optimal from the point of view of maximizing profits, since other actions are a danger to the life of the firm. That is, the harsh forces of competition can narrow the firm's freedom of action in the market and it will have practically no alternatives, except for the pursuit of the goal of maximizing profits in the short run. Similar conditions occur when a recession or inflation weakens consumer demand to such an extent that profits plummet. Methodologically, the profit maximization assumption, although not always an accurate reflection of reality, is still a fairly good approximation to the actual behavior of most businesses that find themselves in such situations. Of course, this is one of the best assumptions that can be made about the goals pursued by such firms.

On the other hand, if the firm is to some extent insulated from competition and is content with above-average profits, it is in the best position to deviate from strict profit maximization. The reason for this is that as long as profits are sufficient to satisfy shareholders, managers have some freedom to pursue goals other than making high profits. However, this freedom does not extend too far. It would be a big exaggeration to say that the behavior of firms that make solid profits is driven by "unprofitable" goals, or that managers lose sight of the impact that the achievement of other goals has on profits.

But the traditional theory of the firm just explains the behavior of the firm by the desire to maximize profits. This category is based on 2 assumptions:

• 1) the owners exercise daily operational control and management of the firm;
• 2) their only desire is to maximize profits.

The theory establishes the thesis of profit maximization when marginal cost and marginal revenue are equal.

However, in practice this theory faces a number of difficulties. First, firms do not use marginal analysis to evaluate or forecast their performance. Indeed, the calculation of marginal cost and especially marginal revenue is rather difficult and is complicated by ignorance of the actual demand curve for the firm's products, the elasticity of this demand with respect to prices and incomes.

Despite the fact that many large firms organize expensive market research, the information received cannot be considered 100% reliable and sufficient. Equally difficult is the estimation of future revenues and costs. Finally, it is almost impossible to predict the actions and reactions of other firms and assess the consequences of their activity.

Attention must be paid to the fact that in modern market economy there is a deep separation of ownership from the right to manage; and, with the exception of a small sole proprietorship, the owners do not exercise operational management, involving professional managers for this.

The traditional theory is not in the best way explains the behavior of the firm, which is why many economists have proposed alternative theories, deriving the behavior of the company from completely different prerequisites and uniting it with other target settings.

In summary, the profit maximization assumption is particularly suited to the following situations:

• 1. large groups firms when nothing can be said about the behavior of individual firms;
• 2. intense competition;
• 3. explanations and predictions of the overall impact of specific changes on prices, output and resources, rather than their specific values;
• 4. consideration of directions rather than precise numerical performance results. But when the behavior of individual firms is considered, when the number of firms is small, when competition does not threaten profitability, and/or when precise numerical estimates are required, then firm objectives must be clearly defined before behavior can be reliably explained and predicted.

The theory of the firm is an important aspect in enterprise economics. Let's introduce its concept. Theory of the firm is a theory that explains and predicts the behavior of a firm, especially in the area of ​​decision-making related to pricing and output. The firm is a complex economic entity. In economics, there are several concepts of the interpretation of the firm.

neoclassical theory The firm considers it as a production (technological) unit, the purpose of which is to maximize profits. The main task of the company is to find such a ratio of resources that would provide it with the minimum production costs. However, the basic prerequisites for the neoclassical interpretation of the firm are the given conditions of activity (perfection of information, complete rationality of behavior, price stability), ignoring the features internal organization (organizational structure, intracompany management), the lack of alternatives in the choice of solutions - made it unsuitable for solving practical problems.

Institutional Theory of the Firm proceeds from the fact that the firm is a complex hierarchical structure operating in conditions of market uncertainty. The main task was associated with explaining the behavior of the firm in a system of expensive and incomplete information, and the focus was on questions about the causes of the diversity of types of firms and their development. Using the presence of transaction costs (transaction costs) as prerequisites, as well as the non-price method of resource allocation inherent in the firm, institutional theory defines the firm as an alternative to the market (price) mechanism for transactions (resource management) in order to save transaction costs.

Another premise of the theory is based on the understanding that, being a complex hierarchical organization, the firm is a set of relationships between the owners of resources involved in it. In this sense, the central issue of analysis is the study of the problem of distribution of property rights, and the firm itself is presented in the form of a contract concluded between the owners of resources, designed to provide the most effective use resources. Since this type of contract is based on the voluntary assignment of power by one party to another, it becomes necessary to control the guarantor of the performer - the "principal-agent" problem, in connection with which there are control costs. Thus, the firm turns out to be the focus of two types of contracts - external (market), reflecting its interaction with market institutions and associated with transaction costs, as well as internal, reflecting the features of the internal organization of the firm and associated with control costs.

Behavioral theories of the firm focus their attention on the active role of firms in the economy, their ability not only to adapt to the changing market environment, but also to change this environment. They proceed from the impossibility of maximizing any goal and focus on the study of the functioning of the internal structures of the firm and the problems of decision making. In this regard, we can single out the entrepreneurial concept of the company, in which the company is considered as a system of interaction between different levels of manifestation of the entrepreneurial function (management). The main task is to consolidate this function, and the behavior of the firm is determined as the result of the interaction of different levels of entrepreneurship. In this concept, the main issue is reduced to solving the “principal-agent” problem, i.e. interaction between the owner and hired managers. Since "agents" always have more complete information, they can use this to their own advantage and to the detriment of the interests of the owner. The consequence of this may be a deviation from the goals of the company, an increase in costs and a decrease in profits. So the main task Intra-firm management is reduced to ensuring the uniformity of their (principal and agent) goals in the long term, and the conditions for its solution are market discipline and the creation of incentive mechanisms.

Another version of this theory is evolutionary concept of the firm. Its essence boils down to the fact that the company evolves under the influence of external and internal factors, and decisions are made based on the characteristics of the internal organization and the traditions that have developed in the company. At the same time, the company does not have a single criterion for the optimal decision-making and its behavior changes depending on the market situation, established traditions and the historical experience of the company.

In the consumer market, as a form of organization, the main place is occupied by an enterprise (in foreign practice, a firm). The history of commercial (i.e., operating for profit) enterprises is rooted in traditional society. Some of their forms are recorded in almost all the great civilizations of antiquity.

From modern firms, commercial enterprises of the pre-capitalist era, as a rule, differed:

• the use of forced labor;
• the traditional nature of the activity (technologies that have not changed for decades, the same products, the structure adopted once and for all);
• a secondary role in the economy compared to the non-commodity, self-sustaining (or subsistence) type of farming that dominated at that time;
• relatively small size - sole proprietorships or partnerships (the latter type of firms is also called partnerships or share companies). The owner (or co-owners) contributed all the capital necessary for the activities of the company and personally managed the company;
• · the interest of the owner (or a narrow group of co-owners) in the success of the company and the almost complete absence of formalism and bureaucracy (everything is decided by the owner himself). This made it possible to make sole proprietorships and partnerships an ideal type of organization for a small firm. Up to our time, about 4/5 of the total number of firms in the developed capitalist countries operate precisely on such grounds.

The modern firm has the following features:

• · dependence external environment(openness);
• production efficiency (effectiveness, excess of results over material, financial and labor costs);
• specialization of production (division of labor into various stages production process);
• production co-operation;
• horizontal and vertical division of labor;
• the need for management.

Modern level economic development society led to the need to create many types of firms.

According to the type and nature of economic activity, firms are divided as follows:

• 1. industrial;
• 2. trading;
• 3. transport;
• 4. insurance;
• 5. freight forwarding;
• 6. tourist, etc.
• 1. Industrial firms - enterprises that are based on the production of goods (usually industrial firms include those in which more than half of the turnover falls on the production of industrial products). As a result of the development of processes of concentration and internationalization of production, the release of the vast majority of products and a very significant part international trade concentrated in the hands of a small group of the largest industrial giants, among which transnational corporations (TNCs) stand out in terms of size and scope of their activities.

In addition, leading industrial firms are, as a rule, the main exporters of capital in a productive form, directed to the creation of foreign own network branches and subsidiaries.

Today, the importance of a particular corporation in international economic relations is determined not so much by the dynamics of the volume of its exports, but by its share in the world production of goods. It is only natural that the world market is now dominated by largest companies- manufacturers of industrial products based in industrialized countries - the USA, Germany, Japan, etc.

• 2. Trading firms are those whose field of activity is mainly carrying out operations for the sale of goods (services). Moreover, such firms can be part of the sales system of large industrial corporations or exist independently legally and economically from other companies (firms) and carry out intermediary operations. Possible narrow specialization trading firms or, conversely, trade in a wide range of products.
• 3. Transport companies - carry out international transportation of goods and passengers. Usually, transport companies specialize in certain types transportation and are subdivided according to this principle into shipping, road, air and rail.
• 4. Freight forwarding companies - have a specialization in the delivery of goods to the buyer, fulfilling orders from industrial, commercial and other firms. At the same time, their functions are quite diverse: checking the condition of containers and packaging, marking, issuing shipping documents, paying the cost of transportation on behalf of the cargo owner, carrying out loading and unloading operations, storing, selecting and completing small lots, information from the consignee about the arrival of the cargo, performing customs formalities, organization of container transportation, provision of cargo shipments with quarantine, sanitary and veterinary supervision documents, etc.
• 5. Insurance companies - provide cargo insurance for international, sea, air, road and other transportation. The vast majority of insurance operations are concentrated in the hands of giant insurance companies, the leading position among which is occupied by American companies that control up to 2/3 of the volume of insurance operations performed in the world.

Firms are categorized as follows:

• 1. private;
• 2. state;
• 3. cooperative.

Private firms.

They can exist in the form of independent independent companies or in the form of associations created both on the basis of a participation system and on the basis of agreements between the participants in the association. Therefore, before entering business relationship with a particular firm, it is necessary to find out whether it is a member of the association and whether it has any agreements with other firms. Depending on the form of association, the company can be:

• legally independent and independently resolve economic issues and meet its obligations
• deprived of economic and legal independence, and the decision business matters in this case depends on the parent company.

As practice shows, certain types of associations traditionally arise, which differ depending on the goals of the association, the nature of economic relations between their participants, the degree of independence of the enterprises included in the association. Among them:

• - cartels;
• - syndicates;
• - pools;
• - trusts;
• - concerns;
• - industrial holdings;
• - financial groups.
• 1. A cartel is an association, as a rule, of firms in the same industry that enter into an agreement with each other regarding mainly their joint commercial activities- Sales regulation.
• 2. A syndicate is a kind of cartel agreement that involves the sale of the products of its participants through a single marketing body created in the form joint-stock company or limited liability companies.
• 3. Pools - associations that provide for a special procedure for the distribution of profits of its participants. The profits of the pool participants enter the common pool, and are subsequently distributed among them in a predetermined proportion.
• 4. Trust - an association where various enterprises that previously belonged to different entrepreneurs merge into a single production complex, losing their legal and economic independence. In this union, all parties to the economic activity of enterprises are united, and not just one side, as in a cartel or syndicate.
• 5. The concern is an association of independent enterprises connected through a system of participation, personal unions, patent and license agreements, financing, and close industrial cooperation. The companies merged into the group remain legal entities in the form of a joint-stock company, but the concern has full control over the activities of its constituent companies.
• 6. Widespread in a number of countries (England, France) has become the creation of industrial holdings, which themselves are not engaged in production activities, but only exercise control over the activities of their member enterprises through a system of participation. The companies included in the holding have legal and economic independence and conclude international commercial transactions on their own behalf. However, the decision of the main issues related to their activities belongs to the holding company,
• 7. The financial group unites legally and economically independent enterprises various industries economies - industrial, trade, transport, credit, etc. At the same time, unlike a concern, one or more banks are at the head of the financial group, which manage money capital of the companies included in it, and also coordinate all areas of their activities. It is important to bear in mind that, compared with other types of associations, the financial group has a lesser degree of organizational formalization. Each member of the financial group acts independently in international trade transactions. However, just like in a holding company, the parent company, which is the core of the financial group, turns into a kind of center for making the most important decisions regarding their business activities.

Now, in the context of the increasing complexity of industrial relations and the strengthening of the internationalization of economic life, concerns and financial groups are becoming the main forms of associations of firms.

State enterprises

Under the state enterprises are understood as purely state, and mixed, or semi-state. In pure state enterprises the state usually owns all the share capital received as a result of nationalization or newly created. In mixed public-private companies, the state, represented by a ministry or holding company, may own a significant part of the shareholding (more than 50%), and then, as a rule, it exercises control over their activities. In mixed enterprises, the leading role is often retained by private companies.

State and municipal unitary enterprises. A unitary enterprise is a commercial organization that is not endowed with the right of ownership of the property assigned to it, which is in state or municipal ownership and belongs to the enterprise on the basis of economic management or operational management.

A unitary enterprise based on the right of economic management is created by decision of the authorized government agency or body local government. founding document enterprise is its charter, approved by the owner of the property.

A unitary enterprise based on the right of operational management (federal state enterprise) is created by decision of the Government Russian Federation in accordance with the law on state municipal unitary enterprises. The founding document of a state-owned enterprise is its charter approved by the Government of the Russian Federation.

Cooperative associations

Cooperative firms (unions) in developed countries are share associations of consumers, farmers or small producers for the implementation of economic activities. One of the main tasks of cooperative unions is the elimination of intermediary links in the domestic and foreign markets, so now they have not only a consumer, but also a production orientation. AT modern world play an important role as national cooperative organizations (agricultural, handicraft and consumer cooperatives), and regional cooperative trade-purchasing organizations and associations of cooperatives in various countries.

Classification of companies (firms) by ownership of capital and control

The classification of firms by ownership of capital and control involves dividing them into the following types:

• national;
• foreign;
• mixed.
• 1. Firms whose capital belongs to domestic entrepreneurs are considered national, and their nationality is determined by the location and registration of the parent company. In particular, the world's largest office equipment company IBM, even with an international nature of activity, is a national US company, since it is registered in the US and only 4% of its shares are held by foreign holders, the rest are concentrated in the hands of American entrepreneurs.
• 2. How foreign firms are defined, the capital of which belongs to foreign entrepreneurs, providing them with full or partial control. Foreign firms are created in the form of branches of subsidiaries and associates of foreign parent companies and are registered in the country of location. In some cases, foreign firms play a leading role in the market of a particular country, so it is necessary to know which parent company the foreign firm belongs to and what is the nature of its subordination.
• 3. Firms are considered mixed, the capital of which belongs to entrepreneurs from two or more countries. The registration of a mixed company is carried out in the country of one of the founders on the basis of the current legislation, which determines the location of its headquarters. At the same time, mixed firms act as a form of international interweaving of capital; they are formed by merging the assets of merging firms from different countries and issuing shares of a newly created company, exchanging shares between firms that retain legal independence, creating joint companies, the share capital of which belongs to the founders on a parity basis or is distributed in certain established by law ratios, the acquisition by a foreign company of a block of shares of a national company that does not give it the right to control. Such companies are called joint ventures when the purpose of their creation is to conduct joint business activities.5

Classification of companies (firms) according to their field of activity.

The typology of companies according to their field of activity assumes their functioning at the national (discussed above) and international levels.

International companies include firms whose scope of production and commercial activities extends to foreign countries. In terms of capital ownership and control, most of these companies are national.

Distinctive features international company are considered:

• a) the presence of a network of controlled production branches and subsidiaries in other countries with a focus either on the production of any products for sale in foreign markets, or on the supply of the parent company with components or raw materials and material resources;
• b) use of technological cooperation and specialization of controlled enterprises;
• c) control and coordination of activities of branches and subsidiaries from one center (parent company).

Branches and subsidiaries have different legal status.

Thus, a branch does not have legal independence and, therefore, cannot conduct business on its own behalf: conclude transactions, keep accounting records. The scope of duties of the overseas manufacturing affiliate usually includes the production of those types of products in which the parent company is interested, and / or their sale in those markets that it determines.

On the contrary, subsidiaries, having legal independence, act on the market on their own behalf and at their own expense. Such companies themselves sign contracts with buyers and are responsible for their execution, as well as legally responsible for their obligations. The parent company does not bear any responsibility for the fulfillment of orders and obligations by the subsidiary, and, by creating it, determines in advance its production specialization, as well as its sales responsibilities, Maintenance products sold, market research, organization and advertising campaigns etc.

According to the classification adopted by the UN, the category of international firms, referred to as "transnational corporations" (TNCs), includes a company that has production capacity Abroad. According to estimates, in the modern world there are over 39 thousand such business entities as TNCs, and the number of their foreign branches and subsidiaries reaches 270 thousand in 125 countries. At the same time, the total volume of foreign direct investment controlled by them exceeds 3 trillion. US dollars.

According to I.N. Gerchikova, a transnational corporation is a special form of organization of the economic activity of a company based on the cooperation of labor of employees of many enterprises located in different countries and united by a single title of ownership of the means of production, and such activities are aimed at suppressing competition and strengthening dominance in world commodity markets, which expresses the essence of the economic policy of TNCs.

The most significant features of TNCs today are:

• - huge scale of ownership and economic activity;
• - a high degree of transnationalization of production and capital as a result of the growth of foreign production activities;
• - the special nature of socio-economic relations within TNCs;
• - the transformation of the vast majority of TNCs into diversified concerns;
• - the presence of a huge number of production and marketing subsidiaries in a wide range of countries;
• - organization of production that is international in nature, based on the division of labor and meeting the interests of parent companies.

Firm and Enterprise: Unity and Difference

basis manufacturing company constitutes an enterprise, that is, a separate specialized economic unit, which was created on the basis of a professional organization organized according to one or another principle. labor collective. At the same time, this collective, on the basis of the means of production available to it, manufactures products or provides services necessary for society.

The boundaries of a firm as an organizational entity and an enterprise as a production and economic unit now do not always coincide. Thus, a large modern firm may include not one, but dozens and even hundreds of relatively independent enterprises and branches, which, among other things, have the right of a legal entity.

The main features of the enterprise as a production and economic structure:

• 1) production and technical unity,
• 2) organizational and administrative independence,
• 3) complete (or partial) economic isolation.

The basis of production and technical unity is a complex of related and complementary industries that together form a complete whole.

The essence of organizational and administrative independence lies in the fact that the enterprise, represented by its management, within the powers granted to it, independently makes and implements decisions regarding the mechanism and results of its functioning, the activities of personnel.

The economic isolation of the enterprise implies that

• - he owns a certain amount of fixed and working capital;
• - the company determines the final financial results its activities, the amount of profit or loss;
• - has the ability, within certain limits, to independently dispose of financial resources(net profit, loans, etc.);
• - has a current bank account (including a currency account), an integrated system accounting and reporting.

It is clear that if the boundaries of the enterprise coincide with the boundaries of the firm, its economic isolation will be complete; if it is included in any firm along with other economic units - partial.

Typology of modern enterprises

According to the accepted classification, enterprises can be subdivided according to various criteria.

First of all - in size. The size of the enterprise, as a rule, is characterized by three main indicators:

• - the volume of products or services rendered;
• - the value of the production potential (the cost of fixed capital);
• - the number of employees.

Depending on the scope of operation and the nature of their products, enterprises are classified into

• - industrial,
• - agricultural,
• - transport,
• - trade, etc.

According to the type of production processes, enterprises with

• - mass (pencil factory),
• - serial (house-building plant),
• - single (shipyard) products.

Taking into account the degree of specialization, the following main types of enterprises are distinguished:

• - universal, producing diverse and not necessarily related products (engineering production);
• - specialized, producing homogeneous products or services (bearing plant);
• - factories, the production process at which consists of separate stages (stages), at each of which a product is created in an independent completed form, which allows using it both within the framework of this enterprise at subsequent stages of production, and transferring it to other enterprises.

Based on the level of mechanization and automation of the main production processes, enterprises can be divided into:

• - automated, where the role of workers is reduced to monitoring and control of equipment (chemical plants, power plants);
• - complex-mechanized, in which a person directly controls the operation of the equipment (modern mechanical engineering);
• - partially mechanized work, which requires the application of certain physical efforts from the personnel.

The most traditional is the typology of an enterprise based on the composition and structure of its technical and production base, which is a set of production elements with the help of which a person directly or indirectly affects the object of labor - raw materials, materials, components, semi-finished products - in order to create the final product.

The technical and production base of the enterprise consists of both active elements ( technological equipment), and from passive ones - buildings, structures, communication facilities - pipelines, overpasses, access roads, etc.6

difference commercial enterprises pre-capitalist era from modern firms;

• the use of forced labor;
• The traditional nature of the activity
• · a secondary role in the economy in comparison with the non-commodity, self-sustaining (or subsistence) type of farming that dominated at that time;
• relatively small size
• the interest of the owner

According to the type and nature of economic activity, firms are divided as follows: industrial, trade, transport, insurance, freight forwarding, tourism, etc.

According to the nature of ownership, firms are divided as follows: private, state, cooperative.

The classification of firms by capital ownership and control involves dividing them into the following types: national, foreign, mixed.

The firm is one of the subjects of the market economy. In her activities, she is guided by interests that determine her behavior to achieve goals. These goals are treated differently by different theories of firms. Traditional theory(the theory of profit maximization). This theory explains the behavior of the firm by the desire to maximize profits. Based on 2 assumptions: 1. The owner exercises day-to-day operational control and management of the firm. 2. The only desire of the firm is to maximize profit, this is achieved when marginal cost and marginal revenue are equal. Firms usually do not use a marginal approach to assess their performance, because. calculating marginal cost and income is difficult, it is difficult to figure out the dynamics of the demand curve for firms' products under the influence of price and income elasticity of demand. Also, in a modern market economy, the owner usually attracts managers to manage it. Therefore, this theory is not able to explain the behavior of the firm in accordance with the realities. managerial theory. 1. operational management carried out not by the owner, but professional manager. 2. The goal of the manager is to maximize sales and incoming income. This approach reflects the modern reality, because in the conditions of JSC, the owners of shares are only formal owners, and management is entrusted to managers. This theory is realistic because manager's salary depends on trading revenue. With the growth of trading revenue, the status of the manager rises, because. this allows you to introduce new methods, expand its staff. Maximizing Firm Growth The overall goal of the firm is to maximize the growth of the firm, managers strive for this in order to increase their status and salary. The owners pursue the goals of personal enrichment, strive for the growth of assets. The rate of retained earnings: the entire profit of the company is divided into two parts, one is paid in the form of dividends, the other remains undistributed and forms a fund for the development of production. The ratio of the undistributed part of the profit to the distributed part forms the rate of retained earnings, or the rate of retention of profit. If managers distribute a large share of profits in the form of dividends, shareholders will be happy, the market price of shares will rise, which will prevent the company from buying shares by competitors. A low savings rate will not provide opportunities for the growth of the firm. Conversely, if managers leave the bulk of profits undistributed, then dividends will be low, shareholders will be dissatisfied, but the opportunity for firm growth will increase. In this case, shareholders may start selling shares, their rate will begin to fall, and there will be a threat of the company being taken over by competitors. The challenge is to keep maximum profits while paying sufficient dividends.