business objectives and stakeholder objectives

Question 1

what are Business objectives?

Answer 1

Business objectives are the aims and targets that a business works towards to help it run successfully.

Question 2

benefits of setting Business objectives

Answer 2

• Setting objectives increases motivation as employees and managers now have clear targets to work towards.
• Decision making will be easier and less time consuming as there are set targets to base decisions on.
• Setting objectives reduces conflicts and helps unite the business towards reaching the same goal.
• Managers can compare the business’ performance to its objectives and make any changes in its activities if required.

Question 3

private sector businesses aim to achieve the following objectives

Answer 3

1. Survival
2. Profit - profits are required for further investment into the business as well as for the payment of return to the shareholders/owners of the business.
3. Growth A larger business can ensure greater job security and salaries for employees. The business can also benefit from higher market share and economies of scale.
4. Market share - increased market share can bring about many benefits to the business such as increased customer loyalty, setting up of brand image
5. Service to the society - providing social, environmental and financial aid. such as social enterprises

Question 4

define social enterprises

Answer 4

has social obj as well as an aim to make a profit to reinvest back into the bst.

Question 5

define market share
and state the formula

Answer 5

is the persentage of total market sales held by one brand or business

market share % = (company sales / total market sales)* 100

Question 6

benefits of increased market share (3)

Answer 6

1. good publicity
2. increased influence over suppliers
3. increased influence over customers

Question 7

define Stakeholders

Answer 7

A stakeholder is any person or group that is interested in or directly affected by the performance or activities of a business.

Question 8

Internal stakeholders: (3)

Answer 8

• Shareholder/ Owners: these are the risk takers of the business. They invest capital into the business to set up and expand it.
• Workers: these are the people that are employed by the business and are directly involved in its activities.
• Managers: they are also employees but managers control the work of others. Managers are in charge of making key business decisions.

Question 9

name the two types of stakeholders group

Answer 9

• external – groups that are outside the business
• internal – those groups that work for or own the business.

Question 10

External Stakeholders: (4)

Answer 10

• Customers: They purchase and consume the goods and services that the business produces.
• Government: the role of the government is to protect the workers and customers from the business’ activities and safeguard their interests.
• Banks: these banks provide financial help for the business’ operations’
• Community: this consists of all the stakeholder groups, especially the third parties that are affected by the business’ activities.

Question 11

the Objectives of internal stakeholder groups

Answer 11

Shareholder/ Owners:
* entitled to a rate of return on the capital they have invested
* Business growth ensure that the value of the shares will increase.
Workers:
* Contract of employment
* Regular payment
* job satisfaction
* job security
Managers:
* secure job.
* Higher salaries
* Managers will also wish for business growth

Question 12

the Objectives of external stakeholder groups

Answer 12

Customers:
* Price that reflects the quality of the good.
* well designed
Government:
* ncrease the total output of the country
* improve employment
* increase government revenue
Banks:
* able to repay the amount
Community:
* offer jobs and employ local employees.
* no harm to the environment.
* socially responsible

Question 13

Public- sector businesses

Answer 13

Government owned and controlled businesses do not have the same objectives as those in the private sector.

Question 14

Public- sector businesses objectives

Answer 14

1. Financial: reinvested into the business for meeting the needs of the society.
2. Service: provide a service to the community
3. Social: providing employment to citizens, providing good quality goods and services at an affordable rate

Question 15

Conflicts of stakeholders’ objectives

Answer 15

As all stakeholders have their own aims they would like to achieve, it is natural that conflicts of stakeholders’ interests could occur. Therefore, if a business tries to satisfy the objectives of one stakeholder, it might mean that another stakeholders’ objectives could go unfulfilled.