Introduction (graphics not included)What is the main objective of an organization? The concept of profit maximization has survived for many as the main objective of an organization for a long time. Is this still true today in modern business? Most large companies are run and operated by management rather than owners, how do they run the company? Still profit maximization, revenue maximization or something else? In this essay, I will briefly outline the key points underlying the economics of a profit-maximizing business and evaluate Baumol's (1959) management model of sales revenue maximization to examine modern management behavior. Profit Maximization The neoclassical model of profit maximization was first suggested by the classical economist Adam Smith (1776), who believed that markets would stabilize at a position of natural equilibrium. He said that based on this, organizations will do everything in their power to achieve maximum benefit for themselves. In economics, profit maximization is the process by which a firm determines the price and level of production that returns the greatest profit. The neoclassical model of profit maximization tells us that the organization's objective is to optimize profits where MC=MR. Profits are shown as a profit locus, π locus showing the zero profit level, the maximum profit level and all points in between. The quantity associated with the maximum level of profit is Qπmax – the quantity of production associated with the greatest distance between the revenue and cost curves. The quantity associated with the maximum profit level is Qrevmax – TR therefore it decreases as revenue for each unit sold following the discounts applied to consumers to encourage them to purchase. The profit maximization model is based on several assumptions. The organization should be certain of the future, which included competitive conditions, direct relationship between prices and profit. However, this assumption is difficult to achieve for the enterprise as the future changes continuously. In the long-term strategy, the organization must achieve the highest net present value. Management's attitude towards risk is neutral.  The analyst should have highly accurate information about the organization's total costs and revenues, or marginal costs and revenues, or both. Profit maximization has been adopted by the management of the company mainly for several reasons. For an organization to survive competition in the goods, services and financial market, it needs profits. Such competition forces management to pay close attention to profits. Furthermore, management compensation is closely related to profitability.