Objective of the Business – Explained

Introduction: Objective of the Business

Business is an occupation in which goods and services are produced and sold in return of money. The primary objective of the business is making profit. The business is set up to serve needs of individual and society through the production and distribution of goods and also rendering of services at profit for the owners.

A business unit cannot survive unless there are customers to buy the products and services. Again, a businessman can earn profits only when he/she provides quality goods and services at a reasonable price. Hence, it needs to attract more customers for its existing as well as new products. This will be achieved with the help of various marketing activities.

Business is highly dynamic and can continue to be successful only by adopting itself to change in its business environment. Finally, successful businesses are built on purpose and also it should go without saying that part of business purpose is to make profit; but making profit should not be the sole purpose of business. There has to be a sense that the service or product of any forms of business provides and brings value to the market, and that because of that value, the business makes profit. Let’s see the various Objective of the Business.

Objective of the Business

There are several objectives of business. The following are the important ones.

Economic Objective of the Business:

Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which include, creation of customers, regular innovations and best possible use of available resources.

Profit Earning:

• Profit is the lifeblood of business, without which no business can survive in a competitive market. In fact profit making is the primary objective for which a business unit is brought into existence. Profits must be earned to ensure the survival of business, its growth and expansion over time.
• Profits help businessmen not only to earn their living but also to expand their business activities by reinvesting a part of the profits. In order to achieve this primary objective, certain other objectives are also necessary to be pursued by business, which are as follows:

• (a) Creation of customers
• (b) Regular innovations
• (c) Best possible use of resources

• As we all know, to run any business we must have sufficient capital or funds. The amount of capital may be used to buy machinery, raw materials, employ men and have cash to meet day to-day expenses. Thus, business activities require various resources like men, materials, money and machines.
• The availability of these resources is usually limited. Thus, every business should try to make the best possible use of these resources. Employing efficient workers. Making full use of machines and minimizing wastage of raw materials, can achieve this objective.

Social Objective of the Business:

• Social objective are those objectives of business, which are desired to be achieved for the benefit of the society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare. No activity of the business should be aimed at giving any kind of trouble to the society.
• If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later. Social objectives of business include production and supply of quality goods and services, adoption of fair trade practices and also contribution to the general welfare of society and provision of welfare amenities. The following are the social objective of the business.

• (i) Production and Supply of Quality Goods and Services
• (ii) Adoption of Fair-Trade Practices
• (iii) Contribution to the General Welfare of the Society

Must Read: ROLE OF SOCIAL RESPONSIBILITIES IN BUSINESS

Human Objective of the Business:

• Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training.
• The human objectives of business may thus include economic well-being of the employees, social and psychological satisfaction of employees and development of human resources. The following are the human objective of the business.

• (i) Economic Well-being of the Employees
• (ii) Social and Psychological Satisfaction of Employees
• (iii) Development of Human Resources
• (iv) Well-being of Socially and also Economically Backward People

National Objective of the Business:

• Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations.
• The goal of the country may be to provide employment opportunity to its citizen, earn revenue for its exchequer, become self-sufficient in production of goods and also services, promote social justice, etc. Business activities should be conducted keeping these goals of the country in mind, which may be called national objectives of business.
• The following are the national objective of the business.

• (i) Creation of Employment
• (ii) Promotion of Social Justice
• (iii) Production According to National Priority
• (iv) Contribute to the Revenue of the Country
• (v) Self-sufficiency and also Export Promotion

Global Objective of the Business:

• Previously India had very restricted business relationship with other nations. There was a very rigid policy for import and export of goods and services. But, now-a-days due to liberal economic and export-import policy, restrictions on foreign investments have been largely abolished and duties on imported goods have been substantially reduced.
• This change has brought about increase in competition in the market. Today because of globalisation the entire world has become a big market. Goods produced in one country are readily available in other countries.
• So, to face the competition in the global market every business has certain objectives in mind, which may be called the global objective of the business.

• (i) Raise General Standard of Living
• (ii) Reduce Disparities among Nations
• (iii) Make Available Globally Competitive Goods and Services

Other Objective of the Business

• Growth Objective: The growth of a business is another major objective of business. The growth of business is an expansion of the business enterprise.
• Market share objective: Business often want to build a larger market share. The concern of some business owners is on how to increase the market share of their business. They usually achieve this objective by wining customers from competitors. Thus the essence of increasing market share is to dominate the market and also possibly increase their product prices.
• Survival: Survival is another important of all forms of businesses. Survival is main objective of any business in today’s competitive world and volatile environment.
• Employee Satisfaction: Business organizations must ensure that they bring satisfaction to their employees.
• Image and reputation: The important objective of business that must also worthy of mentioning is improving image and develop a good reputation. 
• Shareholder Satisfaction: As business organizations increasingly believe in the truism that shareholder satisfaction is inexorably linked to long-term shareholder value.

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