economic objectives of business

Business activities are essentially measured in terms of money, all measurements must show profit. This can ultimately help profitability as the brand becomes more attractive to consumers. Our site uses cookies so that we can remember you, understand how you use our site and serve you relevant adverts and content. not sacking them) This is the problem of separation between owners and managers. An objective is a target set by a business. Consider the following description of the employer-employee relationship (as experienced and enabled through the manager-employee relationship): “A strong, two-way, trusting, working relationship, focused on achieving the business goals and the employee working to their full potential and receiving ‘felt-fair’ pay for that effort.”. We can … Urwick says “earning of profit cannot be the objective of a business any more than eating is the objective of living”. (e.g. Business needs objectives, without objectives the business is like a car without headlights driving blind. Examples of alternative business objectives An increasing number of companies are moving away from profit maximisation and are refocusing their priorities towards the welfare of their suppliers, employees and the planet: Revenue maximisation (occurs where marginal revenue = zero) Increasing and protecting their market share Therefore managers may create a minimum level of profit to keep the shareholders happy, but then maximise other objectives, such as enjoying work, getting on with other workers. Supplier supply the raw materials with the help of which goods are manufactured. Increasing market share may force rivals out of business. More customers mean a good turnover and a good turnover means a fair amount of profit to the business. The community pays for goods and services the business offers to it. Requisite Organization (although having research and practice roots going back 70 years) is a body of work aimed at satisfying the legitimate business needs of the business owner AT THE SAME TIME as satisfying the legitimate psychological needs of human beings for work. Normal Satisfactory Profit. Supplier supply all other components and accessories to the manufacturing organization, which in turn ensures smooth and timely production. Current orthodoxy echo’s the instinctual organising scheme of our forgotten ancestors; and ‘an alpha-power hierarchy’, based more on naked (or barely covered) power. In this, complex and competitive industrial and commercial world everyone tries to woo the customer. No doubt profit is driving force in undertaking any business activity but not the only objective of business. Infact a satisfied customer is an asset who always is expected to bring more and more customers. Supply of Quality Goods and Fair Prices. If we regress to primitive behaviour in our workplaces, complexity is over-simplified, short-term ‘fire-fighting’ (by charismatic heroic ‘leaders’) becomes commonplace, bullying and harassment are daily events, fear suffuses the workplace limiting individual decision-making etc. Human Objectives of Business. Creation of Customers. There are several different types of business objectives. Increased market share increases monopoly power and may enable the firm to put up prices and make more profit in the long run. Objectives of business refer to purpose for which business is established. It is a common belief that money chasing is the only objective of a business. Money flowing in and profit are the two measuring rods of the success of a business, but at best these two can only be called a motivating force for the enterpriser. Any profit the co-operative makes will be shared amongst all members. Co-operatives may have completely different objectives to a typical PLC. This can be better done by educative and repetitive advertisement and by satisfying the customers who are patronizing so that they may stick and ask other to follow them.

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