From-
BADM Dept.
Business objectives are something which a business
organization wants to achieve or accomplish over a specified
period of time.
Business objective is the purpose or the reason for which
a business exists and operates.
These may be to earn profit for its growth and
development, to provide quality goods to its customers, to protect
the environment etc.
According to McFarland, “ Objectives are the goals,
aims or purposes that organizations wish to achieve
over varying periods of time.”
The most business objective meet the
effective following
criteria-
Specific-Objectives are aimed at what the business does, e.g.
a hotel might an objective of filling 60% of its beds a night during
October, an objective specific to that business.
Measurable- the business can put a value to the
objectives, e.g. 10000 in sales in the next half year of trading.
Agreed- Agreed by all those concerned in trying to
achieve the objective.
Realistic- the objective should be challenging, but it should
also be able to be achieved by the resources available.
Time Specific- They have a time limit of when the
objectives should be achieved, e.g. by the end of year.
O rganic O bjectives
Economic O bjectives
Social O bjectives
Types of Business O bjectives
H uman O bjectives
N ational O bjectives
G lobal
Organic Objectives
•Survival
•Growth
•Goodwill and
Image
Every business is established with the hope that it will
exist, survive and thrive for a pretty long period.
Therefore, every business has the 4following organic
objectives:-
Survival- Every business has the objective of its own
survival and existence. It is the basic objective of every
business.
It should be noted that if a business succeeds in surviving
over a fairly long period of time, it would be in a
position to achieve all its objectives, otherwise not.
Growth-Growth means expansion of business activities
by introducing new products or expanding and
diversifying existing product lines or by entering into new
market.
When a business succeeds in
surviving, it would
pursue the objective of growth.
Businessman should do-
Increase its investment
Increase its production capacity
Increase its market share
Increase its geographical area
Use innovative production and marketing strategies
Goodwill and Image- Every business makes every
effort to enhance its goodwill and image.
Businessman should do-
To deal with all the customers with
honesty and integrity.
To take care of the interests of all its stakeholders
properly.
It should be noted that satisfied customers and other
stakeholders are the strongest means of goodwill and
image of a business.
Economic O bjectives
Business is an Economic activity therefore 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.
1.Profit
earning
Profit is the lifeblood of business, without which no
business can survive in a competitive market. In fact
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.
Economic
O bjectives
In order to achieve this primary objective, certain other objectives are also necessary to be
pursued by business, which are as follows:
2. 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.
3 . R egular
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.
4 . 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.
Social
Ooperates
Business exists and bjectives
in society. It draws all its resources from the society
and sells its product/ services to the member of the society.
Social objectives are those objectives of business, which are desired to be
achieved for the benefit of the society.
Since business operates in a society by utilizing its scarce resources,
the society expects something in return for its welfare. No activity of the
business should be aimed at giving any kind of trouble to the society.
Social objectives of business include production and supply of quality goods
and services, adoption of fair trade practices and contribution to the general
welfare of society and provision of welfare amenities.
1 . Prod uction and supply of q uality good s and
Since the business utilizes theservices
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 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.
2 . Ad option of fair trad e
practices
In every society, activities such as 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.
3 . C ontribution 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 centers 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.
H uman
O bjectives
Human objectives refer to the objectives aimed at the well-being as well as
fulfillment of expectations of employees as also of people who are disabled,
handicapped and deprived of proper education and training.
The human objectives of business may thus include economic well-
being of the employees, social and psychological
satisfaction of employees and development of human resources.
1 . 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.
2 . Social and psychological satisfaction
ofemployees
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.
3 . 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.
4 . W ell 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 way.s
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.
N ational O bjectives
Being an important part of the country, every business must have the objective
of fulfilling national goals and aspirations.
The goal of the country may be to provide employment
opportunity to its citizen, earn revenue for its exchange, become self-sufficient
in production of goods and services, promote social justice, etc.
Business activities should be conducted keeping these goals of the country
in mind, which may be called national objectives of
business. The following are the national objectives of business.
1 . C reation 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.
N ational
O bjectives
2 . Promotion of social justice
As a responsible citizen, a businessman is expected to provide equal
opportunities to all persons with whom he/she deals.
She/he 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.
3 . Prod uction accord ing 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.
N ational O bjectives
4 . C ontribute 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.
5 . 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.
G lobal
O bjectives
Earlier India had a very restricted business relationship with other nations.
There was a very rigid policy for import and export of goods and services.
But, now-a-days due to liberal economic and export–import policy,
restrictions on foreign investments have been largely abolished and duties on
imported goods have been substantially reduced. This change has brought about
increased competition in the market.
Today because of globalization the entire world has become a big market.
Goods produced in one country are readily available in other countries. So, to
face the competition in the global market every business has certain objectives
in mind, which may be called the global objectives.
G lobal
O bjectives
1 . R aise general stand ard 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.
2 . 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.
G lobal
O bjectives
3 . Make available globally competitive good s 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.
