Theme 3: Business Objectives Flashcards
1
Q
Who are the 4 influencers in the firm?
A
- Shareholders
- Directors and Managers
- Consumers
- Workers
2
Q
What do shareholders want?
A
Profit maximisation
3
Q
What do directors and managers want?
A
- Sales maximisation- To increase their bonus
- Revenue maximisation- Increase a company’s size and boost prestige
4
Q
What do workers want?
A
- Higher wages
- Job security
- Improved working conditions
5
Q
What do consumers want?
A
- Lower prices
- Better customer service and quality
- Social and environmental causes
6
Q
Illustrate profit maximisation on a graph
A
7
Q
Illustrate sales and revenue maximisation on a diagram
A
8
Q
Illustrate sales and revenue maximisation on a diagram
A
9
Q
Why might a firm choose to revenue maximise?
A
To increase market share which is measured by revenue.
10
Q
Why might a firm choose to sale maximise?
A
To attract customers in order to encourage brand loyalty then profit maximise on other goods.
11
Q
What is profit satisficing?
A
When a firm makes enough to satisfy shareholders, workers and other influencers but then pursues other objectives.
