Question

Consider a very large firm such as Royal Dutch/Shell. Do you think that it is realistic to treat such a firm as an holistic entity? Can you give an example of a situation in which conflicts between different parts of such a firm can arise?

Reference

Firms are supposed to have a single objective,either to maximize profits (in one period models) or to maximize the value of the firm. However, as we shall note in later chapters, most real-world firms have multiple objectives. Profit maximization may be very important for the firm's owners, but managers and employees may have other objectives.