1.5 Business objectives and stakeholder objectives

Question 1

Why are business objectives important?

Answer 1

• Sets out what the business wants to achieve - Gives an idea to employees, potential investors, stakeholders etc. - More successful in gaining people’s trust

Question 2

What are some possible business objectives?

Answer 2

• Survival - Profit - Growth - Market share

Question 3

What are the objectives of social enterprises?

Answer 3

• Help people who are in need - Help the underprivileged - Help the economy - Help the government - Help decrease unemployment rates - Increase GDP

Question 4

Name the internal stakeholders of a business and their role in the business.

Answer 4

• Owners: Interested in the performance of the business and profits - Shareholders: Interested in the amount of dividends they will receive - Managers: Responsible for the performance of the business, if they do well they may gain bonuses or promotions - Employees: Interested in the performance of the business, so they can earn good pay and get better job security

Question 5

Name the external stakeholders of a business and their role in the business.

Answer 5

• Lenders: They are interested in the capability of the business to repay loans and if they can get any interest from the loans they give - Suppliers: They are interested in the amount of cash the business has to be able to pay the suppliers at required dates and if they can get success from supplying the business - Customers: They have an interest in the activities of the business because they want to be sure that the business if going to continue to exist in the future and that they are charged fair prices for the products - Government: Interested in the capability of the business earning high profits so they can receive more tax for spending on things such as education, health etc. - Local community: Interested in what the business offers to the local people, in terms of employment, whether or not the business will have a negative impact on the business etc.

Question 6

What are the main objectives of the private sector?

Answer 6

• Earn profit - Survive - Increase market share - Growth - Economies of scale

Question 7

What are the main objectives of the public sector?

Answer 7

• Increase GDP - Decrease unemployment rates - Provide a better standard of living - Help the economy