The board of directors at a major public limited company sets a financial target of achieving a 12% return on capital employed, which is sufficient to satisfy shareholders and protect the board's tenure. This allows the directors to dedicate remaining corporate resources towards non-financial goals, such as carbon-neutral supply chains.
Which of the following concepts best describes this financial objective, and what is its primary underlying cause?
Profit maximisation, caused by the alignment of shareholder and managerial interests
Sales revenue maximisation, caused by the need to exploit economies of scale in production
Profit satisficing, caused by the divorce of ownership and control in large corporations
Survival, caused by intense competition and high barriers to exit in the market
16 exam-style questions on OCR A Level Economics Business objectives. Each one has a worked solution and a mark scheme showing where the marks go.