Objectives Flashcards
Factors affecting objectives
- sector of industry, for example public sector businesses don’t want to maximise profits but do want to provide a quality service
- size of organisation, for example a new start-up company will just want to survive the first year before looking to maximise profits and grow in the future
- changing circumstances, for example a business might have to respond to the growing need to look environmentally friendly so will have corporate social responsibility as a key objective
Private- main objectives
- maximise profit
- provide a good quality service
- survive
- operate ethically
- Maximise sales
- growth
- cooperate social responsibility
Public- main objectives
- provide a service
- work within a budget
- operate ethically
- serve the local community
Third- main objectives
- support a cause
- provide a service
- raise awareness of the cause
- maximise donations -operate ethically
- survival
- increase numbers of volunteers
Objectives
- maximising profits
- survival
- satisfying
- provide a quality service
- increasing market share
- managerial objectives
- working within a budget
- sales maximisation
- corporate social responsibility
- growth 
Maximising profits
Making a profit means bringing in more money through the business’s is called activities, such as selling goods and services, than they spend on purchasing materials and other running costs of the business, such as wages and rent. As the business grows it will aim to maximise profits which means making as much profit as possible.
Survival
All private sector businesses and, indeed, third sector businesses aim to survive. Survival means avoiding going out of business and having to cease trading. Periods of economic slowdown such as recession, are particularly turbulent times for businesses and many fail, even large PLCs
Satisfying
Satisfying means aiming for a satisfactory or adequate result rather, rather than the best possible outcome. Most private sector businesses would ideally aim to maximise profits; however through satisfying, a business could aim only to make a level of profit which is good enough to satisfy the main stakeholders, perhaps making enough profit to cover satisfactory dividends to shareholders
Providing a quality service
All organisations aim to provide a quality service to their customers or members. Private sector businesses aim to do this to encourage customers to return and to gain a good reputation and attract new customers. Public sector organisations do this to satisfy the needs of the community and improve the standards of living in their area, such as a school offering a quality education. Third sector organisations want to provide a quality service to aid those individuals or groups they aim to help
Increasing market share
Market share is the percentage of total sales in a market that a business has. The business that has the most sales in a market is known as the market leader. Businesses aim to improve their products and services to ensure that existing customers return and to try to entice their rivals customers to their business. Market share can be illustrated as a pie.
Managerial objectives
Managers within large PLCs or public sector organisations may pursue their own objectives. They may try to achieve objectives which they believe will improve their status within the company, for example expansion into new markets, or developing new technologies. They may also aim to have many subordinates reporting to them in order to increase their responsibility, and therefore their salary.
Working within a budget
Some organisations will have the objective of sticking to their annual budget and not overspending. This is particularly true for public sector organisations but could be a short-term objective for any organisation when it is struggling in its market and aiming to ‘steady the ship’ for a while and not make the situation worse.
Sales maximisation
Similar to managerial objectives above, the objective of sales maximisation can arise due to management aiming to achieve personal goals rather than the aims of the business. For example, to maximise sales could mean dropping the selling price of a product; managers, salespeople and even entire branches who were on commission for the number of sales made, will be less interested in the overall profits of the business and more interested in selling as many units as possible.
Cooperate social responsibility
Corporate social responsibility (CSR) refers to organisations aiming to act in an ethical way or in any way that benefits either society or the environment.
Methods to ensure a good CSR
- ethical and environmental responsibilities for example avoiding the use of child labour
- philanthropy for example donating to charity
- economical responsibilities for example using fair and competitive marketing
- legal responsibilities for example abiding by laws that govern businesses
