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Chapter 5: Business & Stakeholders Objectives (Business objectives…
Chapter 5: Business &
Stakeholders Objectives
Business objectives
Why do businesses set objectives?
They give workers and managers a clear target to work towards, which increases motivation
Taking decisions will focus on achieving the objectives
Unite the business towards the same goal
Business managers can compare how the business has performed with their objectives - to see if they have been successful or not
What objectives do businesses set?
Growth
Increased job security
Increase salaries and status of managers
Open up opportunities by moving into new markets and products - decreases risks
Benefit from economies of scale
Survival
New businesses, competitors or recessive economy will lead businesses to set survival as their main objectives.
Return to shareholders
Discourages shareholders to sell their share and managers are able to keep their jobs
Increase of profits paid to shareholders
Increase share price by making plan for the future
Market share
Better publicity
Increased influence over suppliers and other businesses
Increased influence over customers
Profit
To pay a return to the shareholders
To provide finance for further investments
Service to community
Social - provide jobs and support disadvantaged groups in society
Environmental - protecting the environment
Financial - invest back into the social enterprise to expand the social work
Stakeholders objectives
Owners (Internal)
Put in capital to set up and expand the business
Take a large share of the profits
Lose the money invested if have low demands
Risk takers
Want large shares of the profits = large returns/dividends for them
Growth of the business = increasing investment values
Workers (Internal)
Employed by the business
Follow instructions of managers
Requires additional trainings
Full-time or part-time contracts
Can be made redundant if there’s no enough work
Regular payment for their work
Contract of employment
Job security
Job satisfaction
(Maslow’s hierarchy - motivation theory in Ch2)
Managers (Internal)
Also employees, can control work from others
Take more important decisions
Business could expand from their contributions
Business could fail from poor decision making
High salaries
Job securities
Growth of business = higher status, more chance of cooperation with shareholders etc.
Expect all businesses to follow the laws
Want businesses to succeed in their country (increases output)
Passes laws to protect workers and consumers
Responsible for the country’s economy
Government (Ext.)
Customers (Ext.)
Important to business by buying goods or using services that the business offers
Without enough customers, a business might fail
Market research is very important for business, which is to research about the customers wants
Safe and reliable products and service
Value for money
Good quality products
Reliability of service and maintenance
Community (Ext.)
Greatly affected (environmentally, sound issues, scams,...)
Could increase living standards in the community by providing goods or jobs
Jobs for the working class
Clean products
Safe products
Banks (Ext.)
Could potentially be a large source of finance for a business
Expect that businesses could pay interests (businesses need to be liquid - money should be available always)