strategic

ANALYSIS:
CORPORATE OBJECTIVES
What is an objective?
• The business is an economic institution
operating in a socio-economic system.
• Objectives of business should be defined
keeping in view its prevailing environment and
its needs for survival, growth, and stability,
efficiency
• Objectives of business are multi-dimensional in
nature. Business is established and it exists to
achieve multiple objectives.
 What is an objective?
• People enter into business and stay in business
because they want to earn money, social power
and prestige, joy of achievement and other
goals.
• Generally, profit motive is considered to be the
primary objective of business. But profit-
making is not the sole or only objectives of a
business. Every business enterprise has to lay
down its multiple objectives to justify its
existence.
 Classification of objectives
General objectives

Profitability Growth Stability

It should earn profit by Increase in profit, revenue, Handling changing dynamics of
working under rules and capacity, number of markets (continuity of business)-
regulations or by following employees and employee customer satisfaction,
ethical practices. prosperity, etc. creditworthiness, employee
satisfaction etc.

Efficiency Survival
Capability to survive markets jolts
Achieve the best in its field-labor
or shocks. A business should be
productivity, energy consumption,
there with a vision of long-term
quality control etc.
existence.
 Objectives refer to the end points towards which all business activities are
directed:
Objectives lay down the guidelines for various activities and decide the direction
and amount of efforts needed for these activities. Objectives should be feasible and
must be expressed in specific terms with a time limit for achievement. For example,
the objective of a mobile company can be to increase the mobile users by 10% in 2
years.

—SOMEONE FAMOUS
ECONOMIC
Business is an economic activity and
its objectives are mainly economic in
nature.
 Economic objectives
SURVIVAL
Every business aims to ensure that
it continues to survive and exist in
the future. Survival is possible only
when organization is able to earn
Profit Earning enough revenue to cover its costs.
GROWTH
Every entrepreneur undertakes business A business needs to add to its
activities primarily to earn profits. No prospects in the long run. For this, the
business can survive for long without business must grow and expand to
earning sufficient profits. A business needs survive in the long run- sales volume,
profits not only for its existence but also for increase in number of employees,
expansion and diversification. market share, number of products, etc.
 OTHER Economic objectives
INNOVATION
Introduction of new ideas or new methods
of production. Innovation plays a crucial
role in increasing the competitive strength
and improving the image of business
enterprise in the mind of customers.
Optimum Utilization of
Creation of Customers Resources
Demand is essential in order to earn Every business enterprise aims to make
profits. Customers are the focus of all best possible use of physical, financial and
business activities. A business enterprise human resources. This objective can be
can exist and grow only when it is able to achieved through – (a) Employing efficient
capture a big market share, i.e. there are and competent work force; (b) Making full
enough people to buy the products and use of installed machinery; (c) Minimizing
services offered by an enterprise. wastage of materials.
 social
Social objectives refer to the objectives,
which are desired to be achieved for
the benefit of the society. Business
makes use of scarce resources of the
society. So, society expects something
in return for its welfare. Social
objective deals with fulfilling
obligations towards the society.
 social objectives

Business enterprise should not indulge

The business should ensure that
in anti-social and unfair trade practices
there is a regular supply of useful
like black marketing, hoarding,
products with fair quality and at
adulteration, etc. Such practices are not
reasonable prices. Consider
only illegal but also hamper the image of
customer expectations
business community.

Supply of Quality Avoidance of Unfair Trade

products at Fair Prices Practices
 social objectives

Business enterprise should take all

Every business enterprise should reasonable steps to check and protect
create sufficient employment environment. It must make proper
opportunities without any discrimi- arrangement for disposal of effluents,
nation as to caste, religion, sex, etc. smoke, wastes, etc. in order to avoid
various types of pollution.

Generation of Employment
Protection of Environment
Opportunities
 social objectives
Many business organizations
engage in various community
No business can succeed without the
services, like setting up schools,
contribution of its employees. Thus,
charitable dispensaries, donating
business should aim to provide fair
money for social and religious
wages and reasonable working and
activities, etc. Fulfillment of this
living conditions to workers.
objective helps to improve the
reputation and public image of
business.

Welfare of Employees
Community Service
HUMAN OR INDIVIDUAL
Human or individual objectives refer to the
objectives related to the individual needs of the
employees of an organization. As employees are
one of the most valuable resources for an
organization, satisfaction of their objectives is
very important.
HUMAN OR INDIVIDUAL
1. To provide healthy and safe working conditions.
2. To pay fair and competitive salaries and perks.
3. To provide opportunities for personal growth and
development of employees.
4. To provide reasonable security of service.
5. To provide various financial and non-financial
incentives in order to motivate the workers.
6. To encourage employees to take initiative and
participation in management.
Multiple
Management of a business must set’
Multiple Objectives’ for its long-term
survival and growth.
 Multiple objectives
Market Standing
Market standing refers to the position of an enterprise
in relation to its competitors. A business enterprise
must aim to increase its market standing by offering
good quality products at reasonable prices and serving
them better than competitors.

Innovation
In this competitive world, innovations are very
important for a business enterprise to flourish. There
are two kinds of innovation in every business – (a)
Innovation in product or service; and (b) Innovation
in various skills and activities needed to supply them.
 Multiple objectives
Productivity
Productivity is calculated by comparing the value of
outputs with the value of inputs. It is used as a
measure of efficiency. Every business enterprise must
aim to achieve greater productivity through best
possible use of available resources.
Physical and Financial Resources
All business enterprises require physical resources
(like plant, machinery, etc.) and financial resources
(i.e. funds) in order to produce and supply goods and
services to its customers. Every business enterprise
must aim to acquire these resources according to its
requirements and must use them efficiently.
 Multiple objectives
Earning Profits
Earning profits on the capital employed is the main
objective of every business enterprise. Every business
aims to earn a reasonable profit in order to survive
and grow in this competing world.
Manager Performance and
Development
All business enterprises need managers to conduct and
coordinate business activity. So, every business
enterprise must actively work for development of
manager’s performance. Therefore, manager performance
and development is an important objective.
 Multiple objectives
Worker Performance and
Attitude
Worker’s performance and attitudes directly influence
the productivity and profitability of every enterprise.
So, every business enterprise must aim to improve
performance of the workers and to develop positive
attitude among them.
Social Responsibility
Every business is a part of society as it makes use of
scarce resources of the society. So, it must meet the
expectations of the society. Social responsibility refers to
the obligation of business firms to contribute resources
for solving social problems and work in a socially
desirable manner.
SYNTHESIS
QUESTIONS
• Why is there a need to state business
objectives?
• Which classification(s) of objective(s)
is/are the most important?
• How should business objectives be
formulated?
• Is there a need to formulate
objective(s) in each of the
classification?
ACTIVITY
1. After 5 years, the project is envisioned to have grown by producing more of its
product to satisfy all the unsatisfied demand and will further expand its operation
by covering more outlets in the entire province and for the proponents to have
their own business establishment.
2. The project is expected to have a positive return on investment after five years as
it continues to generate and increase its production in nearby towns and regions.
The proposed business also aims to improve its production process and lower
costs; turning the proposed business into a more sustainable one.
3. Giving a service satisfaction to a customer will lead the business to have a lot of
long range objectives that the proponents can envision for the next five years.
There will be expansion, revenue increase, higher market share, and higher
number of employment. Delivery Plus Service will not just make the life of the
residents easy but it can also help the people who are unemployed. Providing a job
is one of the business long range objectives of the business. Delivery plus service
in the next two-three years will probably expand and offer services to all the
residents of the community.
 reference

• https://www.economicsdiscussion.net/
managerial-economics/objectives-of-
business/31843