Business Objectives: Key Goals and Insights

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.

Introduction

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.

Role of Business Unit

Though it is believed that a business has a single objective, that is, to make profit, 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 in the long run unless fair wages are paid to the employees and 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 of Business

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 Supporting Objectives are

• Creation of Customers: The supply of any business is directly proportional to its demands; and demands are raised and met efficiently through extending the market share of the business. More customers mean higher demands, which upon being met by the business organization results in higher profits- meeting the economic objective of the business.

In the long run, a business’s profit-making capacity tends to completely depend on the number of customers it caters to. By providing good quality products or service, a business can expand its market share or create loyal customers, that in turn will ensure stability in the future. 

• Regular Innovations: The days have gone when there were only a countable number of business organizations around the world. In this century there are multitudinous businesses working day and night in almost every part of the world. Hence, it is extremely important to not only survive but to keep up in this world of dynamic competition. To do so a business needs to regularly invest in new technologies and innovations. It is only by providing unique products and services through innovative ideas that a business can run in the long run. 

• Best Possible Use of Resources: A business only has a limited number of resources and it is on the business decision to effectively utilize these resources- like raw materials, labor, capital- in the correct departments. Large corporations survive because they utilize their resources efficiently and invest huge amounts of capital in new innovations.

• Productivity Increase: Although this is the hindmost objective of any business but that doesn’t mean it's not equally important. Productivity of a business depends on the overall output produced by the different activities that are carried out in any business organization. It shows how effectively and efficiently a business is working. More productivity will guarantee a business’s development in the long run. This goal can be achieved by utilizing labor, raw materials and capital efficiently, and minimizing wastage of the resources available.

Social Objectives of Business

• 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 at Reasonable Prices: 

• A business exists because of its customer; and the customers together fabricate a society. Hence, a business exists because of the society it serves through the production and supply of goods and services. These products and services should not only be of good quality but also have reasonable prices so that the customers are in the capacity to buy them. Products or services that have irrationally high prices automatically divert the customers to go for its competitor business. An ethical business does not hoard its products or engage in shrewd marketing strategies to attract customers. 

• Adoption of fair-trade practices

Contribution to the General Welfare of the Society: 

• Unemployment is a considerable issue that society faces in different parts of the world. Since the world runs through business organizations, it comes under the social responsibility of these businesses to generate employment opportunities for individuals of the society it serves. Through this it contributes to the general welfare of the society.

Fair Wages to Its Employees: 

• Trade unions can hinder the daily workings of any business organizations; and they are most probable to be formed in businesses that do not treat their employees ethically. A business does not only run-on raw materials, machines and capital; it comprises the diverse employees that make these machines work for the development and eventual success of any business. These employees are the most essential assets of a business, but before that they are human beings that live in the same society in which the business runs.

• Hence, it is important to provide these employees fair wages for their hard work. Employees benefit programmes are also an important part for a business to meet its social objective. Such benefits will give the employees a sense of association with the business and motivate them to work proficiently towards its expansion.

Performing Community Service- 

• The business is established and developed in a society. It works because of the society; so, it is the responsibility of any business organization to give back to the society in whatever considerable amount it can. It can do so by building public toilets, dispensaries, and transportation. It can also contribute to the growth of society by encouraging education and literacy through building foundations like schools, colleges, and libraries.

• If a business is not in the financial capacity to build any institutions or infrastructure, it still has a way to give back to the society by donating to NGOs which work in diverse fields of services.