Professional Documents
Culture Documents
International School
Grade-9
Chapter-5 Business objectives and stakeholder objectives
Need for business objectives and the importance of them.
An objective is an aim or a target to work towards. All businesses should have objectives.
Objectives give workers and managers a clear target and guidance towards work towards
and this helps motivate people.
Clear and measurable objectives help unite the whole business towards the same goal.
Business managers can compare how the business has performed to their objectives – to
see if they have been successful or not.
Need for business objectives and the importance of them
Measurable - how much they want this objective to affect their business e.g. 85% of seats in an airline are
economy class
Achievable - owners must discuss how they want to act on these objectives
1. Survival: Initially the objective of new firms will be to survive in the market. Moreover,
established business in a recession (Pandemic) time could set survival as the business
objective. Lowering the prices, providing promotional discounts and offering personal
services to customer will enable firms to achieve the survival objectives.
2. Growth: After business achieved the survival objectives, firms target growth as their objective;
Growth objective will allow business:
to make jobs more secure if the business is larger
increase the salaries and status of managers leading to higher motivation
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Abdul Kadir Molla
International School
open up new possibilities and help to spread the risks of the business by moving into
new products and new markets
obtain a higher market share from growth in sales
obtain cost advantages, called economies of scale, from business expansion.
3. Increase market share: Market share is the percentage of total market sales held by one
brand or business.
If the total value of sales in a market is $100 million in one year and Company A sold $20
million, then Company A’s market share is 20 per cent.
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Abdul Kadir Molla
International School
Environmental: to protect the environment.
Financial: to make a profit to invest back into the social enterprise to expand the social
work that it performs.
A social enterprise is in the private sector and has social objectives as well as an aim to make a profit to
reinvest back into the business.
Here are some examples of situations in which a business might change its objective.
A business set up recently has survived for three years and the owner now aims to work towards
higher profit.
A business has achieved higher market share and now has the objective of earning higher
returns for shareholders.
A profit-making business operates in a country facing a serious economic recession so now
has the short-term objective of survival.
The main internal and external stakeholder groups and their objectives
Stakeholder are those people who are directly or indirectly related with business operation.
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Abdul Kadir Molla
International School
Government It passes laws to to expect the to treat businesses
(External) protect workers and business to meet all equally under the
consumers legal constraints, law
such as producing to prevent unfair
only legal goods and competition that
to receive taxes on could damage
time chances of
Successful businesses business survival
will employ workers, to establish good
pay taxes and trading link with
increase the country’s other countries to
output allow international
trade
Lenders to provide finance to to be repaid on the to provide the
(External) the business in agreed date to be agreed amount of
different forms paid finance finance on the
charges, e.g., interest agreed date for the
on loans agreed time period
Local to provide the labour jobs for the working to cooperate with
community services required by population the business,
(External) the business production that does where reasonable
not damage the to do so, on
environment expansion and
safe products that are other plans
socially responsible
Suppliers to supply goods and to be paid on time as to supply goods
(External) services to allow the stated in the service and services
business to offer its agreement between ordered by the
products to its own the business and business in the
customers suppliers time and condition
to be treated fairly laid down by the
and not to be purchase contract
exploited by the
customer business
Owners/ to provide finance to receive a share of to set targets for
Shareholders profits; managers; give
(External) to receive accurate manager adequate
reports on business time and resources
performance to meet targets
Managers to control, command to have sufficient to report to
(Internal) and direct resources authority to fulfil stakeholders; to
roles act legally and
ethically
Employees to provide manual be offered to be honest
(Internal) and other labour employment to meet the
services to the contracts that meet conditions and
business legal standards, e.g. requirements of
minimum wage rate the employment
to be treated and paid contract
in the ways described
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Abdul Kadir Molla
International School
in the employment to cooperate with
contract management in all
reasonable
requests
Service: Provide a service to the public at an affordable rate and meet quality targets set by government.
For example, health services and education services
Social and environment: Protect environment and create employment in certain areas
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