What is the Objectives of Business?

Answer:Objectives of Business – Meaning:

An objective is something you want to achieve. As a learner of NIOS, you may have many

Objectives in mind; one could be to perform well in the examination. Similarly,business objectives are something which a business organization wants to achieve or accomplish over a specified period of time. These may be to earn profit for its growth and development, to provide quality goods to its customers, to protect the environment etc.

These are the objectives of business. In the following section let us classify the objectives of business.

Classification of Objectives of Business:

It is generally believed that a business has a single objective, that is, to make profit. But it cannot be the only objective of business. However, any business unit cannot ignore the interests of its employees, customers, the community, as well as the interests of society as a whole.For instance, no business can prosper in the long run unless fair wages are paid to the employees and customer satisfaction is given due importance. Again a business unit can prosper only if it enjoys the support and goodwill of people in general. Business objectives also need to be aimed at contributing to national goals and aspirations as well as towards international well-being. Thus, the objectives of business may be classified as –

a. Economic Objectives

b. Social Objectives

c. Human Objectives

d. National Objectives

e. Global Objectives

Now we shall discuss all these objectives in details.

Economic Objectives:

Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objectives, which include creation of customers, regular innovations and best possible use of available resources. Lepus learn about these.

i. Profit earning:

Profit is the lifeblood of business, without which no business can survive in a competitive market. Infect profit making is the primary objective for which a business unit is brought into existence.

In order to achieve this primary objective, certain other objectives are also necessary to be pursued by business, which are as follows:

a)Creation of customers:

A business unit cannot survive unless there are customers to buy the products and services.

b) Regular innovations:

Innovation means changes, which bring about improvement in products, process of production and distribution of goods. Business units, through innovation, are able to reduce cost by adopting better methods of production and also increase their sales by attracting more customers because of improved products.

c) Best possible use of resources:

As you know, to run any business you must have sufficient capital or funds. The amount of capital may be used to buy machinery, raw materials, employ men and have cash to meet day-to-day expenses.

Social Objectives:

Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society.

i. Production and supply of quality goods and services:

Since the business utilizes the various resources of the society, the society expects to get quality goods and services from the business. The objective of business should be to produce better quality goods and supply them at the right time and at a right price.

ii. Adoption of fair trade practices:

In every society, activities such as hoarding, black-marketing and over-charging are considered undesirable.

iii. Contribution to the general welfare of the society:

Business units should work for the general welfare and enlistment of the society.

Human Objectives:

The human objectives of business may thus include economic well-being of the employees, social and psychological satisfaction of employees and development of human resources.

i. Economic well being of the employees:

In business employees must be provided with fair remuneration and incentives for performance,benefits of provident fund, pension and other amenities like medical facilities, housing facilities etc.

ii. Social and psychological satisfaction of employees:

It is the duty of business units to provide social and psychological satisfaction to their employees

iii. Development of human resources:

Employees as human beings always want to grow. Their growth requires proper training as well as development. Business can prosper if the people employed can improve their skills and develop their abilities and competencies in course of time.

iv. Well-being of socially and economically backward people:

Business units being inseparable parts of society should help backward classes and also people those are physically and mentally challenged. This can be done in many ways.

National Objectives:

Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations. The goal of the country may be to provide employment opportunity to its citizen, earn revenue for its exchequer, become self-sufficient in production of goods and services, promote social justice, etc. The following are the national objectives of business.

i. Creation of employment:

One of the important national objectives of business is to create opportunities for gainful employment of people. This can be achieved by establishing new business units, expanding markets, widening distribution channels, etc.

ii. Promotion of social justice:

As a responsible citizen, a businessman is expected to provide equal opportunities to all persons with whom he/she deals.

iii. Production according to national priority:

Business units should produce and supply goods in accordance with the priorities laid downing the plans and policies of the Government. One of the national objectives of business in our country should be to increase the production and supply of essential goods at reasonable prices.

iv. Contribute to the revenue of the country:

The business owners should pay their taxes and dues honestly and regularly.

v. Self-sufficiency and Export Promotion:

To help the country to become self-reliant, business units have the added responsibility of restricting import of goods.

Global Objectives:

The competition in the global market every business has certain objectives in mind, which may be called the global objectives. Let us learn about them.

i. Raise general standard of living:

Growth of business activities across national borders makes available quality goods at reasonable prices all over the world. This improves the standard of living of people.

ii. Reduce disparities among nations:

Business should help to reduce disparities among the rich and poor nations of the world by expanding its operation. By way of capital investment in developing as well as under developed countries it can foster their industrial and economic growth.

Business Environment:

Conditions or situations that affect business activities may be regarded as the environment of business. In other words, business environment refers to the surroundings and circumstances, which influence business operations. This environment consists of for cesand factors internal or external to a business firm.

Let us discuss about the external factors which influence or affect business activities and operations and are not controllable by businessmen. We may classify these factors as economic factors, social factors, political factors and technological factors.

(i) Economic factors:

Economic factors include those factors which affect the business environment due to changes in income level of the people, rates of interest on borrowing, availability of capital, tax rates, demand and supply of goods and also changes in government economic policies, etc.

(ii) Social factors:

The nature of goods and services in demand depends upon the changes in habits and customs of people in the society.

(iii) Political factors:

Business environment is adversely affected by the absence of political stability. The workers’ union may demand higher wages, may indulge in frequent strike etc., which affect the normal functioning of business. Problems of law and order situation in border areas, conflicts between countries, absence of favorable economic as well as export–import policy also affect the business activities. Business activities suffer serious setbacks under such circumstances.

(iv) Technological factors:

Technological advancement always leads to improvement in the process of production,transportation and communication. Change in technology is mostly associated with better service and cost efficiency.