Chapter 5 Business objectives and stakeholder objectives (1) Flashcards
(19 cards)
What are business objectives?
Business objectives are the aims or targets that a business works towards.
What is profit?
Profit is the total income of a business (revenue) less total costs.
What is market share?
Market share is the percentage of total market sales held by one brand or business.
What is a social enterprise?
A social enterprise has social objectives as well as an aim to make a profit to reinvest back into the business.
Who is considered a stakeholder?
A stakeholder is any person or group with a direct interest in the performance and activities of a business.
What are the benefits of setting objectives?
Benefits include giving workers and managers a clear target, focused decision-making, clear and measurable objectives, and the ability to compare business performance.
What is the objective of survival?
The objective of survival is when a business has recently set up or when the economy is moving into recession.
Why is profit important?
Profit is important to pay a return to owners and provide finance for further investments.
How are returns to shareholders increased?
Returns to shareholders are increased by increasing profit and increasing share price.
What is growth in a business context?
Growth is usually measured by sales and output (products produced).
Why is growth important?
Growth is important to make jobs secure, increase salaries and status of employees, open up new possibilities, obtain higher market share, and achieve cost advantages.
What is the formula for market share?
Market share % = (Company sales x 100) / Total market sales.
Why is market share important?
Market share is important for good publicity, increasing influence over suppliers, and increasing influence over customers.
What are the objectives of a social enterprise?
Social enterprises usually set three objectives: social, environmental, and financial.
Why could business objectives change?
Business objectives could change due to various factors, such as a business surviving for three years and then aiming for profit.
What are internal stakeholders?
Internal stakeholders include owners, workers, and managers.
What are external stakeholders?
External stakeholders include consumers, government, the whole community, and banks.
What are the objectives of public sector businesses?
Objectives include financial (meet profit targets of government), service (provide a service to the public), and social (protect or create employment).
What is a conflict of stakeholder objectives?
Conflicts can arise between consumers (price and quality), community (environment/low pollution), workers (jobs), and directors (growth).
