Business & its objectives

Business

The organized efforts of enterprises to supply consumers with goods & services for a profit Chambers dictionary, the word business means employment, trade, profession or occupation; a task or errand incumbent or undertaken; commercial activity; a commercial or industrial concern. It can be used in different senses In functional sense It is used to the enterprise In a broad sense

Changes or challenges

Business in transition Pressure of competition Immense opportunities Globalization Technology Information

Business objectives

Objectives form the basis for the functioning of the organization Used broadly they cover long-range company aims, more specific departmental goals & even individual assignments A goal is defined as an intermediate result to be achieved by a certain time as part of the grand plan Targets are specific goals to be achieved

Importance of objectives

Justify the organization Provide direction Basis for management by objectives Help strategic planning Help coordination Provide standards for assessment and control Help decentralization

Guidelines for ideal objectives

Participation Clarity Realism Flexibility Consistency Ranking Verifiability Balance

Factors affecting objectives

Forces in the environment Internal forces The value system of the top executives

Hierarchy of Objectives

Types of objectives
Economic objectives Survival Return on investments Growth Innovation Market share Quality products & services power

Social objectives Stern points out the more educated the society becomes, the more interdependent it becomes, & the more discretionary the use of its resources, the more marketing will become enmeshed in social issues. Marketing personnel are at interface between company & society. In this position ,they have the responsibility not merely for designing a competitive marketing strategy, but for sensitizing business to the social, as well as the product, demand of society Objectives which protect consumer interest Objectives which protect the interest of workers Objectives which protect the interest of the society

Comparison between economic & social objectives

Economic objectives are primarily concerned with the economic health of the enterprise Serve economic motive Enterprise oriented Social objectives are concerned with the needs & welfare of the society

Serve the interest of the society Social oriented Long term

Important both in the short run & long run

Necessary for survival & growth Necessary for effective discharge of social objectives There is general agreement as to what constitutes economic objectives tangible

Justifies the survival & growth Justify economic objectives

There are difference of opinion as to what constitutes social objectives Not tangible

By themselves may benefit society Basic objectives

Social objectives reinforce the achievement of economic objectives Economic objectives provide the base for pursuing social objectives

Clear & definite

May have ambiguity

Primary objectives 1. The extension, development & improvement of the companys business & the building up of its financial independence 2. The payment of fair & regular dividends to the shareholders 3. The payment of fair wages under the best possible conditions to the workers 4. The reduction of prices to consumers

Secondary objectives To provide bonus for workers To assist in promoting the amenities of the locality To assist in developing the industry of which the firm is a member To promote education, research & development in the techniques of the industry or any purpose approved by the directors & members in general meeting Short-run & long-run objectives Top-down & bottom-up approaches

Critics of business

Business activity has a corrosive effect on a range of cherished cultural values Business dehumanizes and exploits workers Business harms interests of consumers Degrades nature and the environment Has destroyed handicraft and rendered artisans jobless Causes scams and scandals Multiplies needs and makes people greedy Business leaders bend rules, cut corners, bribe official and challenge existing authority