Section 1.5 Business Objectives and Stakeholder Objectives Flashcards
What is an objective?
A statement of a specific target to be achieved. It should be SMART (acronym)
What does the acronym SMART stand for?
Specific Measurable Achievable Realistic Time-specific
What are the different types of businesses ojectives?
Survival Profit Growth Market share Corporate social responsibility (CSR)
What is survival? (as a business objective)
Survival tends to be a very important short-term objective of start-up businesses. It is to stay in business for the first two years.
What is profit? (as a business objective)
The aim to produce and sell the level of output where there is the greatest difference between revenue and total cost. Usually a long-term objective for many businesses
What is growth? (as a business objective)
Expand the size of the business in order to increase output and benefit from economies of scale. Usually a long-term objective
What is market share? (as a business objective)
The revenue of a business expressed as a percentage of total market revenue. Increase market share can lead to strong brand image and increased influence on suppliers and consumers
What is corporate social responsibility (CSR)? (as a business objective)
Providing service to society to benefits employees , sonsumers, the community and the environment. Usually influenced by pressure groups, media, trade unions, and the government
What are pressure groups?
A group of like-minded people that puts pressure on businesses and government to change their policies to reach a predetermined objective
What is a social enterprise?
A business with social objectives that reinvests more of its profits back into the business or into benefiting society at large
What are stakeholders?
An individual or group which has an interest in a business because they are affected by its activities and decisions
What are the two types of stakeholders?
Internal and external stakeholders
What are internal stakeholders? Give examples.
Internal stakeholders have an interest in the decisions and activities of a business
Examples: Owners and shareholders
Managers
Employees
What are external stakeholders? Give examples.
External stakeholders also have an interest in the decisions and activities of the business but are not part of the business itself
Examples: Lenders Suppliers Customers Government Local community
What are the objective of owners/ shareholders (internal stakeholder)
- Profit, return on capital
- Growth, increase in value of business
