Business objectives and stakeholder objectives

Business objectives and stakeholder objectives

1. What is a business objectives?

   • The aims or targets that a business works towards

2. What objectives do business set?

   • Business survival
     • When the business just started they are more likely to worry about survival than anything else
     • New competitors makes other firm less secure
     • Lower the price in order to survive
       • Lower the profit of each item sold
       • Can get the product in a cheap price
   • Profit
     • Pay a return
       • For capital invested and the risk taken
     • Provide finance
       • For further investment in the business
   • Increasing returns to shareholder
     • Increasing profit
     • Increasing share size
   • Growth of the business
     • Makes jobs more secure if the business is larger
     • Increase salaries and status of managers
     • Obtain higher market share from growth in sales
     • Obtain cost advantages (Economic of scale
     • Open up new possibilities to spread the risks
     • Can only be achieved if the customers are satisfied
   • Service to the community
     • Social enterprises: In the private sector and they do not have profit as an objective
     • 3 objectives for their business:
       • Social
         • Provide jobs and support for disadvantages groups in society ex. Homeless and disabled
       • Environmental
         • Protect the environment
       • Financial
         • Making profit to help the community
   • Market share
     • Market share% = Company sales/ Total market sales X 100
     • Increased market share
       • Good pulicity
       • Increased influence over suppliers
       • Increased influence over customers ex. Prices

3. What is a stakeholder

   • A stakeholder is a person or group that is involved in business activity

4. Stakeholder groups

   • Owners
     • Main features Risk- takers Put capital in to set up and expand the business Takes share of profits if business succeeds Not enough customers may lose money they invested
     • Objectives Profits Growth of the business - value of investment increase
   • Customers
     • Main features Important in business, buys the goods that the business produces No customers- business fail Good business does 'market research' to provide goods for customers
     • Objectives Safe and reliable products Value for money Well- designed products of good quality Reliability of service
   • Workers
     • Main features Employed by business- Employees Follow instructions from the managers and need training to work effectively  Can be full or part time workers and on temporary or permanent basis  If not enough work for all workers some may be redundant and leave the business
     • Objectives Regular pay for their work Contract of employment Job security- They do not want to find new jobs frequency  Job that gives satisfaction and provides motivation
   • Government
     • Main features Responsible for the economy of the country  Pass laws to protect workers and consumers
     • Objectives Wants business to succeeds in their country- successful business employ workers, pay taxes and increase the country output Expect all firms to stay within law- laws affect business activity
   • Managers
     • Main features  Employees of the business- control works or workers Take important decisions  Their successful decision can expand the business But poor decision can make the business fail 
     • Objectives Important works- high salaries Job security- depends on how successful Growth of business- gives more status and power
   • Banks
     • Main features  Provide finance for the business's operations 
     • Objectives  Expect the business to be able to pay interest and repay capital lent- business must remain liquid
   • The community
     • Main features It is affected by the business activity- dangerous products cause harm to population, factories produce pollution  Jobs allow workers to raise their living standards Many products are beneficial- medicines and transports
     • Objectives Jobs for the working population Production that does not damage the environment Safe products that are socially responsible