Download - 6 Objectives
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PM 05/09/00 H BM - BUSINESS ACTIVITY 1
BUSINESS OBJECTIVES
• It is important for a business to– have well defined objectives (goals)– be clear about what it wants to
achieve
• Business objectives will be– determined by its stakeholders– used to determine success
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PM 05/09/00 H BM - BUSINESS ACTIVITY 2
MISSION STATEMENTS
– immediate and long term objectives– express objectives in ‘qualitative’ terms– often focus on the needs of customers– identifying specific service to be
provided– issued to customers, employees – displayed in reception areas
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PM 05/09/00 H BM - BUSINESS ACTIVITY 3
• in the long run all businesses must make profit to survive
• firms may sacrifice short term profit maximisation for long term profits
• small firms may not wish to maximising profit if it means– increasing workforce/longer hours– VAT threshold
MAXIMISING PROFIT
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PM 05/09/00 H BM - BUSINESS ACTIVITY 4
GROWTH• Growth may mean
– survival – domination of market– economies of scale– diversification– reduced business risk
• Lack of growth may mean – loss of competitiveness– decline in demand– closure
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PM 05/09/00 H BM - BUSINESS ACTIVITY 5
SURVIVAL• There are 3 main times when a business
may consider survival to be one of its main objectives:– early stages of trading
• lack of experience• lack of resources• competition• unforeseen problems• limited recognition
– during a recession– threat of takeover
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PM 05/09/00 H BM - BUSINESS ACTIVITY 6
REPUTATION
• Image and social/corporate responsibility has become increasingly important in business because of
– legislation which favours consumers– changes in social attitudes– competitive pressure
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PM 05/09/00 H BM - BUSINESS ACTIVITY 7
MAXIMISING SALES
• sales revenue maximisation is NOT the same as profit maximisation
• ownership and control are separate
• salaries linked to annual turnover
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PM 05/09/00 H BM - BUSINESS ACTIVITY 8
SOCIAL RESPONSIBILITY
• Behaving in a manner that takes all stakeholders into consideration:
• Staff welfare
• Prompt payment of suppliers
• Ethical trading
• Consideration of local community
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PM 05/09/00 H BM - BUSINESS ACTIVITY 9
Managerial Objectives
• ownership and control are separate• management able to take control• management aims may be
– maximise personal salary– maximise their departmental budgets– improve their status and recognition– maximise no of employees in their charge– maximise their leisure time– delegate as much work as possible– maximise fringe benefits
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PM 05/09/00 H BM - BUSINESS ACTIVITY 10
Provision of a Service• May be main objective of
– public sector body – voluntary sector organisation
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PM 05/09/00 H BM - BUSINESS ACTIVITY 11
What determines business objectives?
• size and status• age of business• sector - public, private or voluntary• whether long-term or short-term
objectives • external pressures• internal pressures• risk• culture