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Aims to: determine the degree of association between the setting of pricing objectives and the firm’s financial performance in the Scottish computer industry; to determine the extent of the relationship between prime pricing objectives and the nature of competition; to analyse the relationship between pricing objectives and firm size; and to determine the degree of association between setting pricing objectives and stages of market evolution. Finds that most firms within the Scottish computer industry had some control over pricing decisions. Furthermore, there was no strong evidence to suggest that the setting of pricing objectives varied systematically with financial performance, levels of competition, firm size or stages of market evolution. Finds, however, that the most profitable firms placed more importance on market share, whereas less profitable firms regarded cash‐flow objectives as more important.

Examines the gap between the microeconomic theory of the firm and business reality. In particular, it seeks to redress the balance between theory and practice by examining the objectives of top Scottish companies. The survey confirms initial expectations that Scottish companies are more owner‐controlled than their UK counterparts. In addition, it also appears that Scottish companies are more likely to pursue profit maximization as a goal than companies elsewhere in the UK. It was found that the majority of Scottish companies were financially conservative and risk‐averse but in the absence of comparable data for UK no conclusions can be drawn from this. Nevertheless, in common with other studies, it is confirmed that Scottish companies are similar to their UK counterparts in so far as they tend to be satisficers and pursue multiple objectives. There appears to be no evidence to support links between size and ownership type and profit maximization. Contrary to expectations, owner‐controlled companies are more likely to operate with a minimum profit constraint than managerially controlled companies. Finally, it is confirmed that the majority of firms are “full‐cost pricers” although hypotheses linking this type of pricing policy with size and market structure, while suggestive of such links, were not statistically significant.