Unit 5 : Business Objectives and Stakeholder Objectives

Question 1

Define Business Objectives

Answer 1

aims or targets that a business works towards

Question 2

4 Benefits of having Business Objectives

Answer 2

1. clear target to work towards
2. helps in decision making
3. unites the business to work towards the same goal
4. can be used to compare how the business performs through objectives

Question 3

5 Business Objectives

Answer 3

1. business survival ( adjusting to the environment, changing price of products if needed )
2. generating profit ( pay a return to owners or provide finance to invest back into the business )
3. returns to shareholders ( discourages shareholders from selling their shares )
4. growth of business ( increases salaries, securing jobs. open possibilities and spreads risks. obtains higher market share )
5. market share ( gives good publicity and more influence over suppliers and customers ) ( market share = company sales/total market sales x 100 )

Question 4

6 Reasons why Business Objectives might Change

Answer 4

1. after being set up and stable, they start working towards profit
2. after they’ve achieved high market share, they’ll aim towards “return to shareholders”
3. a profit making business that is hit with a crisis will have the short term objective of survival
4. changes in consumer tastes and spending patterns
5. technological changes
6. new competition

Question 5

Define Social Enterprise

Answer 5

an enterprise with social objectives and aims to make a profit to reinvest in the business

Question 6

3 Objectives of a Social Enterprise

Answer 6

1. social: providing jobs and support for disadvantaged groups
2. environmental: to protect the environment
3. financial: to make a profit to reinvest in the enterprise and expand its social work

Question 7

3 Objects of a Public Sector Business

Answer 7

1. financial: meet profit targets that are set by the government
2. meet quality targets the government sets and provide services to the public
3. social: protect or create employment in certain areas

Question 8

Define a Stakeholder

Answer 8

any person or group with direct interest in the performance and activities of a business

Question 9

Define Internal Stakeholders

Answer 9

internal stakeholders work/own the company

Question 10

Define External Stakeholders

Answer 10

External Stakeholders are outside the business

Question 11

Internal Stakeholder (Owners, Managers and Employees) Objectives

Answer 11

payments / profits, business growth, increase in the value of the investment and getting higher status / power

Question 12

Customers Objectives

Answer 12

reliable products, value for money, good quality, good design and good service

Question 13

Government Objectives

Answer 13

money from taxes, employing more people, increasing the country’s output

Question 14

Bank’s Objectives

Answer 14

make a profit out of loans and the payback of interest