Unit 1 outcome 1.2 - business objectives Flashcards
What is profit maximisation?
To make as big as a profit as possible in order to pay dividends to shareholders and reinvest money into growing the business.
What is sales maximisation?
To generate as much sales revenue as possible, which is a major aim of the management team.
Advantage of growth as an objective within a business?
Becoming larger may enable a business to take advantage of economies of scale and become more efficient through having lower costs.
May also get some degree or monopoly (controlling) power and be able to charge higher prices.
What is meant be “survival” as an objective?
concern about the risk of take-over from larger, more powerful businesses, so businesses aim to survival to avoid this.
What is managerial objectives? and give some examples of aims.
Where ownership and control is separated; managers within a business may choose to pursue their own individual aims.
e. g. - have money to spend on perks
- get budgets to spend on projects
- to have a lot of staff reporting to them.
What is corporate social responsibility?
A firm may wish to improve its public image and hence its chances of survival and market growth by demonstrating corporate responsibility through measures such as sponsorship of worthy causes or a commitment to ecologically sound practises.
What is meant by the term “satisficing”? and give an example.
a business may aim only to make a level of profit which is sufficient to keep all its stakeholders satisfied.
(a business has the objective of making a satisfactory level of profit)
e.g. - enough to pay acceptable dividends to shareholders.
What is meant by “provision of a quality service”?
and give an example.
an aim to provide the service in the best way possible to meet the needs of their customers or users.
e,g - a hospital or school
What is meant by the objective “ to operate within a budget”?
a business must find the best way of meeting the needs of their users with the limited finance they have available.
What are the 10 main objectives within a business?
- profit maximisation
- sales maximisation
- growth
- survival
- satisficing
- to operate within a budget
- provision of a quality service
- managerial objectives
- corporate social responsibility
- to improve society/ help those in need
What objectives occur within the private sector?
- profit maximisation
- sales maximisation
- growth
- survival
- managerial objectives
- corporate social responsibility
- provisions of a quality service
- satisficing
Which objectives occur within the public sector?
- corporate social responsibility
- provisions of a quality service
- to operate within a budget
Which objectives occur within the third sector?
- growth
- corporate social responsibility
- to improve society/ help those in need
