Common Business objectives Flashcards
What are the common objectives for a business?
Survival, profit maximisation, sales maximisation, market share, cost efficiency, employee welfare, customer satisfaction, social objectives
What is survival? and when would it be an objective?
when a business original starts this is the priority as 1/3 of all business’s fail. managers avoid risky decisions.
when the economy shifts, over-expansion, competitive whirlwind.
What is profit maximisation? and when would it be an objective?
business that only reason for existence is to make money then go. used by business’s that are threatened, or small business that are short term.
What is sales maximisation? and when would it be an objective?
focus on growing customer numbers rather then the profits, better for long term. used by online businesses as its competitive. This is because as customers increase so should prices.
What is Market Share? and when would it be an objective?
when a company wants to secure their future and keep customers loyal. when a dominant company would fight off competitors in order to secure financial security.
What is employee welfare? and when would it be an objective?
when a company has many skilled workers in a tailoring niche market it is important to have low redundancy rates. hard to replace workers.
What is cost efficiency? and when would it be an objective?
when a business wants to minimise costs and keep the organisation lean and the products should be low in differentiation to keep production low. such as a company that has existing distributing channels/suppliers
What is customer satisfaction? and when would it be an objective?
a goal rarely corporate that keeps the customers the top priority, makes just enough loyalty and commitment
What is social objectives? and when would it be an objective?
easy to find on websites, only meaningful if it sacrifices profit/market share. They usually are general overviews. only fully true for ethical businesses.
why is employee welfare in PLCs low?
as shareholders don’t care about staff only the profit they will make.
