Business Objectives : A business objective is an aim or a target that a business collectively works towards

• These help make the business successful but don’t guarantee sucess

• Business objectives gives workers & managers a clear target to work towards

• Decisions will all be focused on basis of “Will it help achieve out objectives”

• Managers can compare how the business has performed to their objectives

• Vital to all businesses

• Different objectives or different companies

Private sector business are to achieve:

Business Survival

When a company has been recently set up, or when the economy is moving into recession, they are more concerned about survival about all else. New competitors also cause insecurity

Profit

When owned by private individuals rather than the govt, the business’ main goal is profit. Owners each take a share of the profit.

Pay a return to the owners of the business for the capital invested & the risk taken

Provide finance for further investments in the business

• However, with this aim, other people will be set up in competition, which only reduces profits in the long term

• Owners should always aim for a satisfactory level of profit , which avoids them having to work too many hours or pay too much in tax to the government

Returns to shareholders

Shareholder own limited companies, the managers if of companies will often set the objective of ‘increasing' returns to shareholders’. This is done to discourage shareholders from selling their shares & helps the managers to keep their jobs

• Increasing profit & the share of profit paid to shareholders as dividends

• increasing share price - managers can try to achieve this not just by making profits but by putting plans in place that give the business a good chance of growth & higher profits in the future

Growth

May aim for growth in size of the business - usually measured by value of sales or output - in order to:

• Make jobs more secure

• increase the salaries & statuses of managers

• Open up new possibilities to spread the risk of the business (conglomerate integration) by moving into new markets

• Obtain a higher market share from growth in sales

• obtain cost advantages, called economies of scale, from business expansion

• Growth will only be achieved if the customers are satisfied with the product or services being provided. It is important to put meeting customers’ needs as a very high priority

Market Share

Market share % = (company sales / total market sakes) x 100

• leads to good publicity & can claim as most popular

• Increased influence over suppliers, they’ll be very keen to sell to a business that is becoming relatively larger than others in the industry

• increased influence over customers

Social enterprises

A social enterprise has social objectives as well as am aim to make a profit to reinvest back into the business

Social enterprises are operated by private individuals

• Social Objectives : to provide jobs & support for disadvantaged groups in society, such as the disabled or homeless

• Environmental objectives: To protect the environment

• Financial objectives : To make a profit to invest back into the social enterprise to expand the social work that it performs

Objectives of public sector businesses

• Financial : meet profit targets set by the govt. Sometimes the profit is re-invested back into the business. Otherwise it is handed over to the govt as the ‘owner’ of the org

• Service : Provide a service to the public & meet quality targets set by the govt

• Social : Protect or create employment in certain areas → especially poorer regions with higher level or unemployment

Stakeholder groups & their objectives

• Stakeholders are people who have a direct interest in the performance & activities of a business

  • Stakeholders can be external or internal

Conflict of stakeholder’s objectives

• Most businesses have several objectives

• Managers would be unwise to ignore the real worries or aims of other groups with an interest in the operation of the business. Furthermore, they also have to be prepared to change the objectives, when required.