For a business to continue working, there must be some distinct objectives that the owners and the managers of the business will work thoroughly to make it happen and working for that particular objective is what is meant in simple terms as the business objective.
There are various kinds of business objectives, the business objective is defined and being identified in different classes. In this section we will continue our discussion about ‘Business Objective’ with ‘Economic Objective’ and ‘Social Objective’ among other objectives of the business.
Business objectives are very specific and measurable in net results. Companies maintain their objectives as the organizational goals as their organization expands. Entrepreneurs and business leaders must track the performance with the objectives to check whether their business is moving in the right direction.
Business objectives act as the compass for the company, directing how the organization should allocate its resources, make their weaknesses overcome with their strengths, and tap opportunities that might be available. Most of the time, objectives remain the same until any external or internal circumstances change.
While business goals describe the company’s end purpose, objectives direct the directions to reach the goal.
Though believed that a business has a single objective, that is, to make profit, but that is not the only objective of business. With pursuing the objective of earning profit, business units do keep the interest of their owners in view. However, any business unit will not ignore the interests of its employees, customers, the community, as well as the interests of society as a whole.
For instance, no business can prosper the long run unless fair wages are paid to the employees and the customer satisfaction is given due importance.
Also, a business unit can only prosper if it enjoys the support and earns goodwill of people in general. Business objectives also contribute to national goals and aspirations as well as towards international well-being. Thus, the objectives of business may be divergent.
Economic objectives refer to the objective of earning the profit and also other objectives which are necessary to be pursued to achieve the profit objective. This includes - creation of the customers, regular innovations and best possible use of the available resources. Profit is the lifeblood of business, without this 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 that the business survives, its growth and expansion over time. Profits help businessmen not only to earn their living but also to expand their business activities by investing into expansion of business sectors.
Other Objectives to Support This Are
Creation of customers
Best possible use of resources
This objective is desired to be achieved for societal benefit. As business operates in a society and by utilizing its scarce resources the business functions, the society thus expects something in return for its contribution. No activity of the business should be aimed at giving any trouble to the society. If business activities lead to socially harmful effects, there is bound to be a public reaction against the business sooner or later, and thus social objectives should be objected to compensate for the same.
Social objectives of business include production and supply of quality and standard goods and services, adoption of fair-trade practices and contribution to the general welfare of society and provision of welfare amenities.
Production and supply of quality goods and services
Adoption of fair-trade practices
Contribution to the general welfare of the society
1. What is meant by external and internal circumstance changes?
External and Internal Circumstances relate to the business environment which changes accordingly. Internal circumstances are those which are under the control of the business owners, these are the changes that occur in the business itself.
External Circumstances related to the exterior environment of the business, which is not under the control of the business.
2. Give the classification of business objectives.
The business objectives are classified as:
Each of these objectives are for distinct purposes which helps in the running of the enterprise eventually reaching its organizational goal.
3. Give some examples of popular business objectives.
Some popular business objective are as follows-
Customer Satisfaction Objective.
4. What is the primary business objective?
The primary business objective is – Economic Objective. Economics which means ‘earning of money’ explains the whole objective. Business houses run with the prior motive of earning money by selling their goods and services. With the attempt of sale, they serve the society and earn money along with goodwill and this is the primary objective, as without incoming money in the business, the business can barely stand in the market.