Success in business cannot be achieved without the setting of right objectives so, we discuss here about objectives of business. Objectives may differ from one unit to the other in view of the nature of an organization.
All businessmen do not have the same objectives to run the business. Sometimes some of the objectives are social welfare oriented; and some of the objectives are profit oriented.
Objectives must be cleared and consistent to achieve the mission of an organization. Lists of business objectives generally include such factors as profit, survival, growth and social responsibility.
Objectives of Business
- Profit: The main objective of business is to earn profit. t eh profit objective plays the major role in business. However, profit means different things to different people because of their values, attitudes, and perceptions. Profit may be of two types-
- Business Profit: The difference between business income (revenue) and business expenses (cost); selling price minus all costs of making and selling a product including taxes.
- Economic profit: What remain after expenses and opportunity costs are subtracted from income. Opportunity cost indicates the cost of choosing to use resources for a purpose, which results in sacrificing the next best alternative for the use of those resources.
- Survival: Survival is the prime objective of business. Survival is very essential to ensure other objectives of business and to compete in the competitive global market.
- Growth: Growth is inevitable for a firm to be successful. The following indicators can measure growth of a firm:
- Increasing market share
- Increasing productivity
- Long term relationship with customers, suppliers, competitors, and marketing intermediaries.
- Harmonious labor relations
- Good corporate culture
Social Responsibilities of Business
Profit earning cannot be the sole motive of business activity. Businessmen have a social responsibility that must be met. Moreover, business organization produces goods and services to generate profit.
At the same time, it must have some impact on society as well as the whole community. The responsibility of businessmen is the provide the goods and series in that way, which are not harmful to the society. Besides another responsibility of businessmen is to supply goods and services at a fair price.
In addition to fulfilling numerous roles, businessmen need to perform some specific objectives such as-
- Creation of employment
- Creation of markets
- Using creativity
- Investment of capital
- Exploitation of resources
Other Content of Business:
- What is the Definition of Business?
- Nature and Scope of Business
- Components / Elements of Business
- Features / Characteristics of Business