business objectives pdf

Objective of business:

Objective of business means the purpose for which the business is established. It is believed that the main objective of business is to make profit and avoid loss. We do admit that profit is a driving force in undertaking any business activity but it is not the sole objective of any business. “in the words of Urwick earning of profit cannot be objective of a business any more than doing eating is the objective of living”. A business which is hunting after profits and ignores other objective will not be doing service to the community. We here classify the objectives of business under three heads and then examine them briefly. (1) Economic objectives (2) Social objectives (3) Human objectives.

 ECONOMIC OBJECTIVES:

                Business, as we know, is primarily an economic activity. The major economic objective to be achieved by business is: 1) Earning of Profit 2) Creation of market and innovation.

Profit earning: The primary objective of business is to produce and sell goods for profit, of course, through the satisfaction of human wants. A business which does not earn profit cannot stay in the market for a longer period. The income of enterprise, therefore, must exceed expenditure over a period of time. Profit is necessary for the enterprise to insure its own survival, growth and expansion. In the word of Peter F.D Rucker “The problem of any business is not the maximization of profit but the achievement of sufficient profit to cover the risk of economic activities and thus to avoid losses.” It is clear from the above definition that a business enterprise should work for responsible profit which should cover its own future risk. If the profit is made by over-charging customers, indulging in malpractices such as hoarding, black-marketing, smuggling, etc. it will be against the ethics of business. It will be against the ethics of business. It will be regarded robbery and not a business activity.

Creating Marketing: Every business tries to create customer for its products and services. The more the customers are created, the wider will be the market for the goods and larger the profit.

Technological improvements: The business, if it is to stay in the market, must offset stagnation by using efficient methods of production. The creation of new products, new design and application of new techniques of production contributes to growth, change and expansion in the economy. Continue reading.....

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