objectives

Question 1

objective advantages

Answer 1

• 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

Question 2

corporate social responsibility

Answer 2

a business will sacrifice some of its profits to invest in ways that improve customer experience

Question 3

profit maximisation

Answer 3

firms will try to reduce costs or increase their prices to increase sales revenue and profits

Question 4

sales maximisation

Answer 4

firms will lower prices to encourage customers to buy their products on special offer

Question 5

increase market share

Answer 5

through tactics such as advertising, a firm may gain sales from the competition and so increase its market share

Question 6

growth

Answer 6

firms can achieve this by buying over another shop or joining with another business

Question 7

managerial objective

Answer 7

this is an objective specific to the manager’s role eg to work within a budget

Question 8

provision of a service

Answer 8

a firm may focus on improving the standards of service it offers to its customers by training its staff

Question 9

improving customer satisfaction

Answer 9

a firm will achieve this by offering customer complaint cards or a good returns policy at shops

Question 10

partnership

Answer 10

to grow

Question 11

LTD

Answer 11

sales max, profit max

Question 12

PLC

Answer 12

sales max, profit max, maximise shareholder return, dominate the market, social responsibility

Question 13

local council

Answer 13

to provide a wide range of services, to cut costs, to meet local needs

Question 14

charity

Answer 14

increase donations, social responsibility

Question 15

private sector

Answer 15

• growth
• profit maximisation
• sales maximisation
• social responsibility
• provision of a service

Question 16

public sector

Answer 16

• social responsibility
• provision of a service

Question 17

third sector

Answer 17

• relieve poverty
• advance education
• advance religion
• carry out objectives of the community

Question 18

why have an objective of growth?

Answer 18

• 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

Question 19

example of CSR

Answer 19

• donating to charity
• recycling
• treating staff right
• equal opportunities policy

Question 20

advantages of good CSR policy

Answer 20

• 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

Question 21

disadvantages of good CSR policy

Answer 21

• 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

Question 22

why would a firm change its objectives?

Answer 22

• the economy has changed
• the competition has launched a new product
• technology
• product life cycle