The traditional approach to the theory of the firm assumes a utility function with a single argument, that of profit or income maximization. Recent theoretical advances have enabled analysts to add a second argument to the utility function — that of risk — and to assess the tradeoffs between risk and return as alternative, often competing, goals. But the goals of risk and return do not exhaust the complete set of short, intermediate and long-run objectives which farmers and their families have expressed. Clearly the goal functions of farmers are multi-dimensional, and include income, risk, community status, leisure time, survival growth, etc. In fact, we have argued else where that in a long-run planning context, the common perception of profit as a goal may in fact include various dimensions or components including dividends paid to shareholders, value of the firm at the end of the planning horizon, probability of financial collapse and net tax free cash. Furthermore, the relative importance of various goals may differ depending on the type of . decision being made; for example, in times of financial stress, survival may be the most important short-run goal, but growth and expansion may still be the dominant long-run goal.
Boehlje, Michael, "Multiple Goals And Mathematical Programming" (1981). Economic Staff Paper Series. 63.