Business Structure Flashcards
What is the private sector?
Includes all the businesses set up by individuals or group of individuals.
What is the public sector?
Includes all the businesses whose activity is owned/ run by the government for the benefit of everyone.
What are the aims of businesses in the private sector?
1) Survival: For a new business this is likely to be a key objective due to large amounts of risk and uncertainty regarding success.
2) Profit maximisation: Producing a level of output the product or service which generates the most amount of profit.
3) Gaining market share: The business focuses on capturing as many customers as possible with a view of making profits later.
4) Sales maximisation: Achieving the highest amount of sales revenue is most important.
5) Cost efficiency: The business tries to reduce all its expenses to their lowest possible levels. This should ensure survival.
6) Employee welfare: The business tries to ensure the wellbeing and safety of its employees.
7) Customer satisfaction: Customers needs and wants are met as much as possible.
8) Social objectives: The business tries to ensure it has the maximum positive impact on society and/ or the environment.
