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Sir Talha
03332617860 Page 1
Chapter 5
Business objectives and stakeholder
objectives
Business Objectives are the aims or ...
Sir Talha
03332617860 Page 2
Increased market share give a business
 Good publicity
 Increased influence over suppliers
...
Sir Talha
03332617860 Page 3
Stakeholder
group
Main Features Most likely objectives
InternalStakeholders
Owners  Risk tak...
Sir Talha
03332617860 Page 4
 Safe products that is socially responsible.
Banks  Provide finance  Repayment of principa...
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Chapter 5 business objectives and stakeholders objectives

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O Level / IGCSE Business Studies

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Chapter 5 business objectives and stakeholders objectives

  1. 1. Sir Talha 03332617860 Page 1 Chapter 5 Business objectives and stakeholder objectives Business Objectives are the aims or targets that a business works towards. Importance of setting objectives  Provide clear target.  Business performance can be analyzed.  Make decision making easy. Objectives of Private Sector 1. Survival If a business does not survive, its owners lose everything. Therefore, businesses need to focus on this objective the most when they are: starting up, competing with other businesses, or in an economic recession. 2. Profit Profit is what keeps a company going and is the main aim of most businesses. Normally a business will try to obtain a satisfactory level of profits so they do not have to work long hours or pay too much tax. Profits are needed to  Pay return to the owners  Provide finance for further investment 3. Returns to Shareholders This is to discourage shareholders from selling their shares and it helps managers to keep their jobs. Return to shareholders are increased in two ways  Increasing profit ( to give dividend)  Increasing share price ( by growth in business) 4. Growth Growth can only be achieved when customers are satisfied with a business. When businesses grow  They create more jobs and make them more secure.  The status and salary of managers are increased.  a business is able to spread risks by moving to other markets,  It gains a larger market share.  It gains cost advantages, called economies of scale. 5. Market share Market share is the proportion of total market sales achieved by one business.
  2. 2. Sir Talha 03332617860 Page 2 Increased market share give a business  Good publicity  Increased influence over suppliers  Increased influence over consumers 6. Providing a service to society A social enterprise has social objectives as well as an aim to make a profit to reinvest back into the business. Social entrepreneur has often three objectives  To provide jobs and support for disabled and homeless  To Protect environment  To make a profit ( to invest back into the social enterprise to expand the social work) Why Business objectives could change  When survival has achieved business may works towards higher profits  When high market share is achieved business may work for higher return to shareholders  Profit making business may set survival as short-term objective if there is recession in economy. Objectives of public sector businesses  To provide service to the public and meet quality targets set by government.(service)  To protect or create employment in certain areas.(Social)  To meet profit targets set by government.(financial) Stakeholders A stakeholder is any person or group with a direct interest in the performance and activities of a business. Stakeholders can be internal or external.
  3. 3. Sir Talha 03332617860 Page 3 Stakeholder group Main Features Most likely objectives InternalStakeholders Owners  Risk takers  Investors  Lose of money in loss  Get share of profits  Profit, return on capital.  Growth, increase in value of business. Workers  Employees  Get training  May get redundant  May be part or full time  High salaries.  Job security.  Job satisfaction. Managers  Take important decisions  Employees and control company  Responsible for success or failure of business  High salaries.  Job security.  Growth of business so they get more power, status, and salary. ExternalStakeholders Customers  Important for business  Dissatisfaction leads to failure  Safe products.  High quality.  Value for money.  Reliability of service and maintenance. Government  Responsible for economy  Pass laws  Employment.  Taxes.  National output/GDP increase Community  Affected by business activity  May get jobs and beneficial services  Employment.  Security.  Business does not pollute the environment.
  4. 4. Sir Talha 03332617860 Page 4  Safe products that is socially responsible. Banks  Provide finance  Repayment of principal amount  Repayment of interest Conflict of Stakeholders Objectives

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