MERRYLAND INTERNATIONAL SCHOOL
BUSINESS STUDIES Grade 8 Notes
Chapter 5 -Business objectives and stakeholder objectives
1. What is a business objective?
A business objective is a specific target a business aims to achieve. Objectives provide direction and help
measure success.
Example: An airline might set an objective to reach 85% seat occupancy on all its flights.
2. Why are business objectives important?
Provides Direction-Objectives give a clear focus to all areas of the business. They guide decision-making
and help employees understand what the business is working towards. Motivation-Having clear objectives
can motivate employees, as they know what is expected and can work toward specific goals. Achieving
objectives brings a sense of accomplishment and recognition. Benchmarks for Success-Objectives serve
as measurable standards to evaluate performance. They help assess whether the business is meeting its
goals and what improvements are needed.
3. What are the common business objectives?
Survival
Survival is the most basic objective, especially for new or struggling businesses. It means continuing
operations and avoiding closure during uncertain or competitive conditions.
Profit
Profit is the financial gain made when revenue exceeds costs. It is essential for rewarding investors,
reinvesting into the business and ensuring long-term sustainability.
Growth
Growth involves expanding the size, output, or presence of a business. It can lead to increased revenue,
economies of scale and a stronger market position.
Market Share
Market share is the portion of total sales a business captures in its industry. Increasing market share helps a
business become more competitive and gain brand recognition.
Corporate Social Responsibility (CSR)
CSR refers to a business's commitment to operate ethically and contribute positively to society and the
environment. It includes practices like reducing pollution, supporting communities and ensuring fair
treatment of workers.
Business objectives are not fixed and may evolve over time in response to changing market conditions or
internal developments. For instance, a newly established company may initially focus on survival, but later
shift its focus toward generating profits and expanding its operations.
4. What factors influence CSR as a business objective?
CSR becomes important due to:
Pressure Groups
Pressure groups are organizations that campaign for ethical and environmental practices. They can
influence businesses by organizing boycotts or public campaigns that affect reputation and customer
loyalty.
Media Awareness
Media coverage can highlight unethical business practices, creating public pressure for change. Positive
media attention, on the other hand, can enhance a company’s image when it adopts socially responsible
actions.
Trade Unions
Trade unions advocate for workers' rights and fair treatment. They may push companies to adopt better
working conditions, fair wages and ethical labor practices.
Government Regulations
Laws and regulations require businesses to follow environmental, labor and safety standards. Failing to
comply can lead to penalties, legal issues and damage to the company’s reputation.
Example: A clothing brand may use sustainable materials due to public pressure and media campaigns.
5. What are the objectives of social enterprises?
Social enterprises aim to meet social or environmental goals. Profit is reinvested into the community.
Example: A community bakery reinvests profits to provide job training for locals.
6. Who are stakeholders?
An individual or group which has an interest in a business because they are affected by its activities
and decisions
Types: Internal (Owners, Managers, Employees) and External (Lenders, Suppliers, Customers,
Government, Community)
7. Who are the different stakeholders of a business and what are their objectives?
Owners/Shareholders - Owners and shareholders want the business to be profitable so they can earn
high dividends. They also aim for a rise in the share price to increase the value of their investment.
Managers - Managers seek job satisfaction and recognition for meeting targets or improving
performance. They often expect bonuses, promotions, or salary increases as rewards.
Employees - Employees want secure jobs and fair wages that reflect their effort and role. They may also
seek opportunities for growth, training and promotion.
Lenders - Lenders such as banks want timely repayment of loans and interest. They also assess the
business’s ability to repay before extending credit.
Suppliers - Suppliers want prompt payments for the goods or services they provide. They also expect to
be treated fairly and not face pressure to lower prices.
Customers - Customers expect good-quality products at reasonable prices. They also value after-sales
service and consistency in product availability.
Government - Governments expect businesses to pay the correct taxes and follow legal regulations.
They also aim for businesses to support employment and economic growth.
Local Community - The local community benefits when businesses provide jobs, sponsor local events,
or reduce environmental impacts. They are concerned about noise, traffic, or pollution from business
operations.
8. Why do conflicts occur between stakeholder objectives?
Different stakeholders have different priorities. One decision can benefit one group but harm another.
Example: Raising prices may benefit owners but upset customers.
9. How do private and public sector objectives differ?
Private Sector: Profit-driven, owned by individuals/groups, objectives vary.
Public Sector: Service-focused, owned by government, objectives include:
• Accessible – Used by all regardless of location/income
• Affordable – Cheaper or free services
• Open to all – No discrimination
