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
