BUSINESS OBJECTIVES Flashcards
1
Q
define objectives
A
are medium/long term plans to coordinate business and acts as targets
2
Q
why are objectives set?
A
provide quantifiable steps to achieve aims
Clarify direction
Measure success against targets
Motivate employees to achieve
reward employees
3
Q
SMART targets
A
Specific Measurable Agreed Realistic Time-related
4
Q
common objectives
A
- survival
- profit maximisation
- sales maximisation
- high market share
- cost-efficiency
- employee welfare
- customer satisfaction
- social objectives
5
Q
survival…
A
- Most likely for new firms; reduce high-risk activities
- Focus on finding customers/ building loyalty
- Also for financial problems, new competition
6
Q
profit maximisation…
A
- Produce at a level that maximises profit
- Need to grow business
- Better than taking a loan, need to pay shareholders
7
Q
sales maximisation…
A
- good for continuous target setting
8
Q
high market share…
A
- Get customers now, focus on profit later
- Established brand, makes shops want to stock product
- Good indicator for investors
9
Q
cost-efficiency…
A
- Reduce expenses to the lowest level to help survival and profit
- Key for business with low product differentiation
- Lower wages/fewer jobs, lower quality, less spending on advertisement
10
Q
employee welfare…
A
- Vital for staff retention
- Creates loyalty and greater productivity
11
Q
customer satisfaction…
A
- Generates loyalty
- Positive reputation
12
Q
social objectives…
A
- Improves perceptions of business that will increase sales
- benefit society
