Chap 5. Business Objectives And Stakeholders Objectives Flashcards
What is a business Objective?
An aim or target that a business wants to achieve in the future
List the importance of business objectives.
. Starting point of all business decision, strategies and activities
. Give a sense of direction to the business
. Give workers and managers a clear target to work towards
. Facilitate decision making
. Enables better coordination within whole business and reduces conflicts
. Business can determine whether it is performing well or not
What are the Main objectives of businesses?
. Survival
. Growth / expansion
. Profit
. Return to shareholders
. Increased market share
. Service to the Community
When is “survival” an objective for a business ?
. When a business is newly set up
. During increased competition
. During an economic recession
Why is profit important to a business?
. Reward to entrepreneur for capital invested
. Indication of success and it improves reputation of business
. Ensures continuity
. Profitable businesses tend to expand and provide Job security to workers
. Profit encourages more businesses to set up
. Provides finance for expansion and future projects
. Improves credit worthiness of firms
. Encourages shareholders to invest
Why do some firms aim for growth?
. To attract more customers
. To be able to face competition
. To enjoy a good reputation
. Less likely to close down
. Is more Credit worthy
. Can invest in more projects like new technology
. Can spread risks through diversification
. Enjoy higher status
. Benefit from economies of scale
Define market share.
Market share refers to the amount of customers a business has that is the contribution of a business to the total market sales
What are the benefits of increased market share?
. Increased profits and sales
. Attract customers and workers
. Good publicity for goods
. Suppliers provide credit
. Loan facilities
What is a social enterprise?
A private sector business who do not aim only profit but reinvests them for benefit of society
Define stakeholder.
A person or group who is interested in our directly involved in the performance or activities of a business
List the Different Stakeholders involved in a business.
. Owners
. Workers
. Managers
. Government
. Banks
. Local community
. Customers
What are the roles of owners?
. Invest capital
. Set up firm
. Expand business
What are the objectives of owners?
. Profit maximisation
. Expansion
. Good image
What are the roles of workers?
To produce goods and services
What are the objectives of workers?
. Regular payment
. Job security
. Fringe benefits
. Job satisfaction
. Motivation
. Improve their performance
What are the roles of managers?
. Plan and control work
. Give instructions to workers
What are the objectives of managers?
. High salaries
. Job security
. Growth of business to get more status
What are the roles of goverment?
Pass laws and control the economy
What are the objectives of goverment?
. Obtain tax revenue
. Higher employment
. Firms abide by their laws
What are the roles of banks?
. Provide finance to businesses
. Provide credit facilities
What are the objectives of banks?
Firms pay back their debts
What are the roles of local community?
Provide local services to firms
What are the objectives of local community?
. Firms provide job to people
. Firms offer continuous supply of goods and services
What are the roles of customers?
They buy the goods and services of the business
What are the objectives of customers?
. Obtain safe and reliable products
. Obtain value for money
. Well designed and reliable products
