Theory of the frim and traditional views would refer to the maximization of profit as the sale prime objective of every business enterprise.
In the past, the excess of demand against supply of goods and services provided the ground for realization of more number of sales and consequently higher earning and better profitability. Variations in the desires of customers as well as lack of supply resulting to unsatisfied market demands would not lead to competition or giving of any extra effort on provision of better quality.
These limitations will create four different environments such as "firm proper", "industry", "national" and "international" and each of these shall impose specific conditions on the atmosphere in which the firm operates.
Modern management theories, however, emphasize the overtaking of supply as against demand . As such, the manager"s main focus of attention would be directed towards formulation of objectives and strategies that would lead to the satisfaction of customer and would also make the product long last .
Such new objective and strategies are not only essentially important in ensuring the firm success but also would fall in line with the tradition objective of business entites as "profit maximization" .
Success or failure of every business enterprise today would depend on such factors as proper definition of comprehensive objective and strategies,clear understanding of business environments, equilibriom between applied factors and restrictions and firm"s capabilities in utilizing such factors.