1.5 Business Objectives Flashcards
(23 cards)
What are business objectives?
Aims and targets a business works towards to help it run successfully.
Why are business objectives important?
They increase motivation, aid decision-making, reduce conflicts, and help assess performance.
What is the objective of survival?
To continue operating in a competitive or difficult market by lowering prices or cutting costs.
What is the objective of profit?
To earn income after deducting costs. Important for reinvestment and shareholder returns.
What is the objective of growth?
To expand sales/output. Leads to job security, better pay, economies of scale, and more market share.
What is market share?
The proportion of total market sales achieved by one business.
What are the objectives of social enterprises?
To provide social, environmental, and financial aid rather than maximizing profit.
Do business objectives change?
Yes, they change depending on market conditions and business growth.
What is a stakeholder?
Any person or group interested in or affected by a business’s activities.
What are internal stakeholders?
People inside the business like owners, employees, and managers.
What are external stakeholders?
People outside the business like customers, government, banks, and the community.
What are the objectives of shareholders?
Profit (return on capital) and business growth (increases share value).
What are the objectives of workers?
Job security, regular pay, job satisfaction, and motivation.
What are the objectives of managers?
Job security, higher salaries, and business growth.
What are the objectives of customers?
Fair prices, reliable/safe products, quality, and truthful advertising.
What are the objectives of the government?
Business success (employment, tax revenue), and regulatory compliance.
What are the objectives of banks?
Loan repayment with interest. Concerned with business liquidity.
What are the objectives of the community?
Jobs for locals, environmental protection, and socially responsible products.
Why do stakeholder objectives conflict?
Different stakeholders want different things; satisfying one may hurt another.
Give an example of stakeholder conflict.
Higher salaries for workers = lower profits for shareholders.
What are the objectives of private sector businesses?
Profit, survival, growth, market share.
What are the objectives of public sector businesses?
Service quality, social impact, meet government financial targets.
How are public and private sector objectives different?
Private = profit-focused; Public = community service & social welfare.
