objectives Flashcards
objective advantages
- the firm can measure its performance against the goal
- targets can be set for workers
- all workers are following a common goal
- workers are motivated to achieve the goal as the aim is clear
- workers can be awarded for reaching a clear target
corporate social responsibility
a business will sacrifice some of its profits to invest in ways that improve customer experience
profit maximisation
firms will try to reduce costs or increase their prices to increase sales revenue and profits
sales maximisation
firms will lower prices to encourage customers to buy their products on special offer
increase market share
through tactics such as advertising, a firm may gain sales from the competition and so increase its market share
growth
firms can achieve this by buying over another shop or joining with another business
managerial objective
this is an objective specific to the manager’s role eg to work within a budget
provision of a service
a firm may focus on improving the standards of service it offers to its customers by training its staff
improving customer satisfaction
a firm will achieve this by offering customer complaint cards or a good returns policy at shops
partnership
to grow
LTD
sales max, profit max
PLC
sales max, profit max, maximise shareholder return, dominate the market, social responsibility
local council
to provide a wide range of services, to cut costs, to meet local needs
charity
increase donations, social responsibility
private sector
- growth
- profit maximisation
- sales maximisation
- social responsibility
- provision of a service
public sector
- social responsibility
- provision of a service
third sector
- relieve poverty
- advance education
- advance religion
- carry out objectives of the community
why have an objective of growth?
- the firm can dominate the market and therefore control price
- through diversification the firm will spread its risk
- exploit economies of scales
- avoid a takeover by another competitor
example of CSR
- donating to charity
- recycling
- treating staff right
- equal opportunities policy
advantages of good CSR policy
- good reputation makes it easier to recruit employees
- employees may stay longer reducing recruitment and training costs
- employees are more motivated and productive
- good relationship with local authorities makes doing business easier eg planning permission
- can boost sales
disadvantages of good CSR policy
- additional costs
- difficult to measure
- can backfire on the company
- firms may be distracted and give less attention to sales and profits
- firm has to constantly monitor their activities
why would a firm change its objectives?
- the economy has changed
- the competition has launched a new product
- technology
- product life cycle
