If a wholly owned firm is managed by the owner, he will make operating decisions which maximize his utility.
These decisions will involve not only the benefits he derives from pecuniary returns but also the utility generated by various non-pecuniary aspects of his entrepreneurial activities such as the physical appointments of the office, the attractiveness of the secretarial staff, the level of employee discipline, the kind and amount of chariatable contributions, personal relations with employees, a larger than optimal computer to play with, purchase of production inputs from friends, etc.
The optimum mix of the various pecuniary and non-pecuniary benefits is achieved when the marginal utility derived from an additional dollar of expenditure is equal for each non-pecuniary item and equal to the marginal utility derived from an additional dollar of after tax purchasing power