OBJECTIVES OF BUSINESS

[shibli]

the objectives of business may be classified as -
a. Economic Objectives
b. Social Objectives
c. Human Objectives
d. National Objectives
e. Global Objectives

Now we shall discuss all these objectives in detail.

Economic Objectives

Economic objectives of business refer to the objective of earning profit and also other
objectives that are necessary to be pursued to achieve the profit objective, which include,
creation of customers, regular innovations and best possible use of available resources. Let
us learn about these.

i. Profit earning
Profit is the lifeblood of business, without which no business can survive in a competitive
market. Infact profit making is the primary objective for which a business unit is brought into
existence. Profits must be earned to ensure the survival of business, its growth and expansion
over time. Profits help businessmen not only to earn their living but also to expand their
business activities by reinvesting a part of the profits.
In order to achieve this primary objective, certain other objectives are also necessary to be
pursued by business, which are as follows:

a) Creation of customers
A business unit cannot survive unless there are customers to buy the products and services.
Again a businessman can earn profits only when he/she provides quality goods and services
at a reasonable price. For this it needs to attract more customers for its existing as well as
new products. This is achieved with the help of various marketing activities.

b) Regular innovations
Innovation means changes, which bring about improvement in products, process of production
and distribution of goods. Business units, through innovation, are able to reduce cost by
adopting better methods of production and also increase their sales by attracting more
customers because of improved products. Reduction in cost and increase in sales gives
more profit to the businessman. Use of power-looms in place of handlooms, use of tractors
in place of hand implements in farms etc. are all the results of innovation.

c) Best possible use of resources
As you know, to run any business you must have sufficient capital or funds. The amount of
capital may be used to buy machinery, raw materials, employ men and have cash to meet
day-to-day expenses. Thus, business activities require various resources like men, materials,
money and machines. The availability of these resources is usually limited. Thus, every business
should try to make the best possible use of these resources. This objective can be achieved
by employing efficient workers, making full use of machines and minimizing wastage of raw
materials.

http://www.nios.ac.in/Secbuscour

[bidita]

Business objectives are goals or targets that a business set for itself, they differ according to the type of business. Examples are:
1. Survival-usually short term, that is to sustain in the business, or in times of recession to break-even.
2. profit maximisation-objective of many businesses, to earn high profits.
3. Growth-measured through market share.
4. Customer satisficing
5. Diversification-this's growing bigger internally & externally, by means of entering into new markets & investing.
6. Globalization-to be recoginzed throughout the world.

[goodboy]

The economic objectives of business are most necessary to its survival and growth. But these can be achieved only when the business has some social responsibilities towards the society. The social obligations are as follows:


a. Provision of employment:

Business involves employment of the factors of production. Hence, expansion of business means creation of more work opportunities to the members of the society.

As self employment is the order of the day, a businessman can earn the respect of the society by employing others, like transport, warehouse etc., for his activities. Thus, the people engaged in the work of aiding trade are provided with gainful occupations and employment.

b. Production of articles of standard quality:

As earlier said, the gaining of profit is directly related with the consumer satisfaction. Hence, a business is bound to produce articles of standard quality. Otherwise, with the stiff competition around, he will be nowhere in the business arena.

c. To charge reasonable prices:

Charging reasonable price is another social responsibility of a business. Prices which cover the costs of production and have a fair margin of profit will be acceptable to the society. Excessive prices will not help the prosperity of any business. It is the social obligation of the business to see that its products become affordable to the consumers in general and not only the rich. Aiming at unreasonable profits may disturb the roots of business.

Howard Bowen has said that "social responsibilities of business include high level of employment, high standard of living, swift economic progress, economic stability and national security".

[shibli]

Social Objectives

i. Production and supply of quality goods and services
Since the business utilizes the various resources of the society, the society expects to
get quality goods and services from the business. The objective of business should be to
produce better quality goods and supply them at the right time and at a right price. It is not
desirable on the part of the businessman to supply adulterated or inferior goods which cause
injuries to the customers. They should charge the price according to the quality of the goods
and services provided to the society. Again, the customers also expect timely supply of all
their requirements. So it is important for every business to supply those goods and services
on a regular basis.

ii. Adoption of fair trade practices
In every society, activities such as hoarding, black-marketing and over-charging are
considered undesirable. Besides, misleading advertisements often give a false impression
about the quality of products. Such advertisements deceive the customers and the
businessmen use them for the sake of making large profits. This is an unfair trade practice.
The business unit must not create artificial scarcity of essential goods or raise prices for the
sake of earning more profits. All these activities earn a bad name and sometimes make the
businessmen liable for penalty and even imprisonment under the law. Therefore, the objective
of business should be to adopt fair trade practices for the welfare of the consumers as well
as the society.

iii. Contribution to the general welfare of the society
Business units should work for the general welfare and upliftment of the society. This is
possible through running of schools and colleges for better education, opening of vocational
training centres to train the people to earn their livelihood, establishing hospitals for medical
facilities and providing recreational facilities for the general public like parks, sports complexes
etc.
http://www.nios.ac.in/Secbuscour

[shibli]

Human Objectives

i. Economic well being of the employees

In business employees must be provided with fair remuneration and incentives for performance,
benefits of provident fund, pension and other amenities like medical facilities, housing
facilities etc. By this they feel more satisfied at work and contribute more for the business.

ii. Social and psychological satisfaction of employees

It is the duty of business units to provide social and psychological satisfaction to their
employees. This is possible by making the job interesting and challenging, putting the right
person in the right job and reducing the monotony of work. Opportunities for promotion
and advancement in career should also be provided to the employees. Further, grievances
of employees should be given prompt attention and their suggestions should be considered
seriously when decisions are made. If employees are happy and satisfied they can put their
best efforts in work.

iii. Development of human resources

Employees as human beings always want to grow. Their growth requires proper training as
well as development. Business can prosper if the people employed can improve their skills
and develop their abilities and competencies in course of time. Thus, it is important that
business should arrange training and development programmes for its employees.

iv. Well being of socially and economically backward people

Business units being inseparable parts of society should help backward classes and also
people those are physically and mentally challenged. This can be done in many ways. For
instance, vocational training programme may be arranged to improve the earning capacity
of backward people in the community. While recruiting it staff, business should give preference
to physically and mentally challenged persons. Business units can also help and encourage
meritorious students by awarding scholarships for higher studies.

http://www.nios.ac.in/Secbuscour

[shibli]

National Objectives
i. Creation of employment

One of the important national objectives of business is to create opportunities for gainful
employment of people. This can be achieved by establishing new business units, expanding
markets, widening distribution channels, etc.

ii. Promotion of social justice

As a responsible citizen, a businessman is expected to provide equal opportunities to all
persons with whom he/she deals. He/She is also expected to provide equal opportunities to
all the employees to work and progress. Towards this objective special attention must be
paid to weaker and backward sections of the society.

iii. Production according to national priority

Business units should produce and supply goods in accordance with the priorities laid down
in the plans and policies of the Government. One of the national objectives of business in our
country should be to increase the production and supply of essential goods at reasonable
prices.

iv. Contribute to the revenue of the country

The business owners should pay their taxes and dues honestly and regularly. This will increase
the revenue of the government, which can be used for the development of the nation.

v. Self-sufficiency and Export Promotion
To help the country to become self-reliant, business units have the added responsibility of
restricting import of goods. Besides, every business units should aim at increasing exports
and adding to the foreign exchange reserves of the country.

[shibli]

National Objectives

i. Raise general standard of living

Growth of business activities across national borders makes available quality goods at
reasonable prices all over the world. The people of one country get to use similar types of
goods that people in other countries are using. This improves the standard of living of people.

ii. Reduce disparities among nations
Business should help to reduce disparities among the rich and poor nations of the world by
expanding its operation. By way of capital investment in developing as well as underdeveloped
countries it can foster their industrial and economic growth.

iii. Make available globally competitive goods and services
Business should produce goods and services which are globally competitive and have huge
demand in foreign markets. This will improve the image of the exporting country and also
earn more foreign exchange for the country.

[shibli]

Conditions or situations that affect business activities may be regarded as business environment.

The various external factors which influence or affect business activities and operations
are:
(i) Economic factors
(ii) Social factors
(iii) Political factors
(iv) Technological factors.

Economic factors
Economic factors include those factors which affect the business environment due to
changes in income level of the people, rates of interest on borrowing, availability of
capital, tax rates, demand and supply of goods and also changes in government
economic policies, etc. For example, you may have noticed that if the level of income
of people goes up, there is increased demand for goods and services. Similarly when
interest rates on loans are lower people spend more on buying durable goods like, car,
home etc. Growth of business naturally takes place as a result of increased spending
by consumers.

(ii) Social factors
The nature of goods and services in demand depends upon the changes in habits and
customs of people in the society. With rise in population the demand for household as
well as other goods has increased. The nature of food and clothing has also changed
to a great extent. Demand for packaged food and ready-made garment has increased
in recent times. All these force the business to produce goods accordingly. So the
social and cultural factors have also affected the production pattern of business.

(iii) Political factors
Business environment is adversely affected by the absence of political stability. The
workers’ union may demand higher wages, may indulge in frequent strike etc., which
affect the normal functioning of business. Problems of law and order situation in border
areas, conflicts between countries, absence of favourable economic as well as export–
import policy also affect the business activities. Business activities suffer serious set
backs under such circumstances.

(iv) Technological factors
Technological advancement always leads to improvement in the process of production,
transportation and communication. Change in technology is mostly associated with
better service and cost efficiency. In recent years, information processing and storage
with the use of computers and telecommunication facilities have developed rapidly.
People now prefer to use mobile phones in place of landline phones. Now-a-days
electronic appliances have replaced electrical equipments very widely. Business activities
are bound to suffer if enterprises do not adopt upto-date technology as and when
necessary.

[shibli]

Please see the attachment

[nature]

From all the objectives of Business Economic Objectives is very important and the economic events also includes -

Creating Markets

Every business tries to create customers for its products and services. The more the customers are treated, the wider will be the market for the goods and larger the profit.

[nature]

The Social Objectives of Business also includes these terms -

Provision of more employment:
 
Business provides employment to the people. It thus helps in increasing the standard of living of the members of the society.

Cooperation with the government:

The business community should adopt a positive approach towards the policies of the government of the country. They should pay all taxes and dues in time to the government. All business activity should be carried within the legal frame work of the country.

[goodboy]

I think this link contains some valuable terms about business objectives:

http://www.abusinessfranchise.co.uk/set-key-objectives-for-your-business.html

Please check it.
Thank you.

[nature]

The business objectives in the sectors of Economic factors also includes -

Creation of Customer:

A business unit can not survives unless there are customers to buy the products and services. Again a businessman can not earn profits only when he or she provides quality of goods and services at a reasonable price. For this it needs to attacked  more customers for its existing as well as new products. this is achieved with the help of various marketing.

[hassan]

Economic objectives includes:

1. Every business is started for earning profit because profit is the acid test of every business.
2. Earning of profit can be made when exchange of goods takes place. so every business has the objective of production of goods.
3.The primary aim of business is to effect sale for the product produced. This can be made possible through creation of market. So every business has the objective of creating market for the products.

[hassan]

Human Objectives:

Human objectives require careful consideration and well-being of shareholders, consumers and employees. The following are the human objectives of the business:

    1. The business should render welfare to its employees.
    2. The consumer should be supplied with qualitative products so that they will feel satisfied.
    3. The business should have the objective of providing enough satisfaction to the shareholders. They should feel that their money is not misused by management.
    4. The business should have the objective of being helpful to the government. The business is the main contribution of funds to the government.