It has been argued that profit maximization is an unrealistic description of the organizational behavior of large publicly held corporations.The modern corporation, so the argument goes, is too complex to accommodate such a simple explanation of the managerial behavior. One alternative argument depicts the manager as an agent for the corporation’s shareholders.

Managers, so the argument goes, exhibit “satisficing” behavior; that is, they maximize something other than profit, such as market share or executive perquisites, subject to some minimally acceptable rate of return on the shareholders’ investment. Do you believe that this assessment of managerial behavior is realistic? Do you believe that the description of shareholder expectations is essentially correct? If not, then why not?