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Business Studies Chapter 5: Business Objectives and Stakeholder Objectives
Business Studies Chapter 5: Business Objectives and Stakeholder Objectives
Benefits
gives a clear target to work towards
motivates people
help unite business towards the same goal
can compare how business has performed to their objectives
decisions focused on whether or not it helps to achieve objectives
Different business objectives
most common objectives
business survival
most concerned
when business has recently been set up
when economy is moving into recession
lower prices to survive
profit
needed to
pay a return to owners
provide finance for further investment
returns to shareholders
increasing profit and the share of profit
increasing share price
growth of business
make jobs more secure
increase salaries and status of managers
open up new possibilities
help spread the risks
obtain higher market share from sales growth
obtain cost advantages
market share
increased market share
good publicity
increased influence over suppliers
increase influence over customers
market share % = (company sales ÷ total market sales) x 100
service to community
operated by private individuals
three objectives
social
environmental
financial
Why they could change
examples
owner of business aims to work towards high profit
business achieved higher market share
profit-making business faces serious economic recession
Stakeholders:
main internal and external groups
groups of people affected by it
owners
profits, return on capital
workers
income, job security, satisfying work
managers
salaries, status, control
consumers
good and services, quality, good value
government
employment, taxes, increasing national ouput
the whole community
jobs, clean environment, safe products
banks
conflict of their objectives
growth
jobs
environment/low pollution/jobs
price and quality
Objectives of public sector businesses
financial
service
social