Question

Explain any five objectives of business.

Answer 1

Although business is run solely to earn a profit, nowadays, with growing diversity, the objectives of business have expanded. It is no more limited to earning profits and have multiple objectives. The following are the multiple objectives that a business aims at achieving simultaneously.

(a) Innovation: It means developing new techniques by incorporating new ideas to meet new demands. It is a continuous and never-ending process. With the help of new techniques, a business can reduce its cost of production and provide new and superior products at a low price compared with competitors. Thus, innovation is of immense need if a business wants to attract new consumers and grow. In today’s world, it has been realised that innovation is the only way by which a business can remain ahead of its competitors.

(b) Maximum profit: Profit has always been the sole motive of every business. It is quite rational for anyone who invests a certain amount of money in business to expect a higher amount in return. The profit-earning capacity of a business decides its growth prospects. The higher the profits, the higher is the amount reinvested in the business, and consequently, the higher are the growth prospects and vice versa.

(c)Market share: Usually,every business faces competition. Moreover, each business wants to stay ahead of its competitors. The only way to do this is to capture the maximum market share (i.e., by catering to the needs of a large number of consumers). A business with this objective must aim at providing products of superior quality to consumers at a comparatively low price.

(d)Workers’performances and their attitude: Theproductivity and profitability of a business are dependent on its workers’ performances and their attitude. A motivated and satisfied worker contributes the maximum to the achievement of the goals of a business. Thus, every business must aim at creating a healthy environment that encourages its workers to make a positive contribution .

(e) Social responsibility: It has been realised that a business does have certain responsibilities towards society. These are termed social responsibilities. Business, as an integral part of society, must contribute to solving social problems such as poverty, lack of employment opportunities and environmental pollution. The fulfilment of these social objectives helps a business to earn a positive reputation—that is, goodwill.