Firms are coalitions with routines, slack, and negotiated goals.
Cyert and March's 1963 account: firms do not maximise anything single, they satisfice across a coalition's competing goals, and organisational slack is what absorbs the conflict.
In practice
- A firm's stated objective is growth, its budget process rewards margin, and the sales incentives reward volume; the outcome is negotiated, not chosen.
- A charity with a mission statement, a funder's requirements and a founder's preferences satisfices across all three and maximises none.