1.1.2 Business Objectives Flashcards
Profit
The reward or return for taking risks. Total Sales Revenue - Total Costs = Profit
Entrepreneurs
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
Sales Maximisation
Sales maximisation occurs when the firm sells as much as possible without making a loss.
Profit maximisation
Total profit is maximised at an output level when marginal revenue = marginal cost.
Satisficing
Satisficing behaviour is an alternative business objective to maximising profits. It means a business is making enough profit to keep shareholders happy or it’s sufficient for investors to maintain confidence in the management they appoint.
Maximisers
Maximisers behave in a traditional economic way. They will always try to make the best possible choice from the available alternatives.
Satisficers
Satisficers examine a limited set of alternatives and choose the best of them.
Market share
the portion of a market controlled by a particular company or product.
Return on investment
Measures the gain or loss generated on an investment relative to the amount of money invested. ROI = (Net Profit➗Cost of Investment) x 100. Measured in %
Cost efficiency
The act of saving money by making a product or performing an activity in a better way.
Social objectives
A social objective is a statement that details a specific desired outcome of a project that is related to the interaction of the individuals, groups, and institutions within a society.
Employee Welfare
Maintaining a healthy and safe work environment and improving staff motivation and productivity are critical issues for every workplace.
Customer satisfaction
Customer satisfaction indicates the fulfillment that customers derive from doing business with a firm. In other words, it’s how happy the customers are with their transaction and overall experience with the company.
