1.5 Business Objectives and Stakeholder Objectives Flashcards
Unit 1: Understanding Business Activity
Objective
Aim or target to work towards
Why are objectives important?
Clear target to work towards
Focus for decision making
Motivates and guides employees
Measurement of success
Survival
Ensure the business doesn’t close down due to situations
Why?
- New business
- Recession
- Competitors
- Stay in business
Market share
Proportion of total market sales achieved by one business
Why?
- Increase customer loyalty
- Brand image
- Customer base
- Increased sales
Provide a service
Solve social and environmental business
Why?
- No to make a profit
- Help the local community
- Provide aid
Profit
Income of a business after deducting total costs
Why?
- Source of finance
- Returns to shareholders
- Growth
- Rewards for taking risks
Why do objectives change?
Previous objectives already met and need to set new ones
Change in economic conditions
Competition
Change in leadership
Stakeholders
A person or group that affect or is affected by the business
Shareholders/owners
Risk takers of the business that invest capital to expand and set up their business
Employees
Workers that are employed by the business and are directly involve in the activities
Managers
Take important decisions to run a business
Shareholders/owners objectives
Profit
Survival
Growth
Market shares
Employees objectives
Regular payments
Job satisfaction
Job security
Managers objectives
- Growth
- Higher salaries before profit
