1.5.3 Business Objectives Flashcards
(12 cards)
What is an objective?
Goals set for the business as a whole. They derive from the directors aims
What are the 6 objectives businesses may have?
-sales maximisation
-Market share
-Cost efficiency
-Employee welfare
-Customer satisfaction
-Corporate social responsibility
What is sales maximisation?
Where the primary goal is to sell as much of a good or service As possible without incurring a loss
Why do managers like to sales maximise?
Because they find sales figures more satisfying as targets
What is market share?
% of the market a business has in either revenue or units sold
When may market share be a good objective?
In a competitive market where consumers switch between suppliers
EG- supermarkets
What is cost efficiency?
Achieving desired outcomes with the least amount of resources and at the lowest possible cost
How can cost effeciency be achieved?
-paying min wage to unskilled
-lean production
-lowering quality or prod
Economic of scale- lowering av. cost
What is employee welfare?
Improve employee health morale to reduce absenteeism and boost productivity
Give some examples of employee welfare
medical insurance
Housing
Toilets
What is customer satisfaction and where is it most commonly an objective?
-In service industries
-They will attempt to identify and understand what customers want and provide it
What is corporate social responsibility?
aims to be ethically and responsibly mindful of its impact on society and the environment, going beyond legal requirements and focusing on positive contributions.
