What are the objectives of business? Explain it. |
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| Ans : Business is very important for economic. The main objective of the business is to earn profit by supplying goods and services to the customers. There is always give and take relation in the business As business organization performs business activities in society. It has also responsibility to fulfill human, social and economic objectives. The objective of business may categorize under the following headings:
A. Economic objectives
B. Social objectives
C. Human objectives
D. National objectives
A. Economic objectives:- Economic objectives focuses on fulfilling and satisfying demands of customers by supplying goods and services with a purpose of earning profit. It provides contribution for the expansion and diversification of business. The economic activities of business are as follows:
i) Earning profit:- Profit is the most important objectives of the business. Profit is required not only for its existence but also for expansion and diversification of business. Profit is essential for paying salaries, wages, capital, rent, rates etc.
ii) Production of goods and services:- Production is concerned with the best utilization of organizational resources through efficient management system. It should satisfy the consumer considering the purchasing power, taste, preference and needs and wants of consumer.
iii) Creation of Market:- Business activity can survive if there are enough consumers to buy their products. So, the products should create in the market by fulfilling the needs of consumers at reasonable price.
iv) Innovation:- It is concerned with the development of new concept, ideas, models, design, structure, knowledge and technology. The needs of customers change with change in time. So, business should innovate advancement in production by using technology.
B. Social objective:- Business organization operates in the society. So, it cannot survive and growth unless it meets the needs of the society. It needs to fulfill social obligations. It is not only economic entity but also a social institution. The social objectives of the business are:
i) Supply of goods in proper price:- Business should provide desirable goods and services at reasonable price. Effort should make to reduce cost in order to reduce price. When price is decreased the demand for the product will increase.
ii) Maintain social environment:- Business organization should maintain social environment by controlling noise, sound, air, water pollution etc. which may affect the health of public. It should also maintain good social relation with society by taking necessary measure to protect the environment.
iii) Supply of quantity goods:- The supply of goods and services to the consumer at a reasonable price is the main responsibility of business. It’s aim should be consumer satisfaction by meeting their changing needs.
iv) Provide employment opportunities:- Business provides employment opportunities to the different level on the basis of the skills, knowledge, experience and educational qualification. Right people should be placed at right job. Business generates more employment opportunities.
C. Human objectives:- Business activities are conducted by the human beings working as individual or group in an organization. Without human power the organization cannot achieve its objectives. Business has various interest groups such as consumer suppliers, creditors, employees, investors etc. Human objectives of business are as follows:
i) Welfare of employees:- Employees are directly involves in the production and distribution of business. Facility of proper salary, wages, good working environment, job security, promotion, medical facilities etc. should be provided to the employees.
ii) Payment to creditors:- Creditors are those who supply, raw materials and finished goods in credit. So, the objective of business is to make payment to the creditors in proper time.
iii) Return to investors:- Investors invest capital and take risk for the establishment of business should be to provide proper rate of return to the shareholders on uniform bases.
iv) Satisfaction of consumers:- The ultimate aim of business is to supply quality goods and services for the satisfaction of consumers. So that the demand of his product is maintained. Profit is made by satisfying consumer needs. Satisfied consumers are the backbone of business.
D. National objective:- Business organizations are the indispensable of nation. They do business by considering national rules, regulations, norms and values. The main objective of business is to promote economic development of the nation through proper use of resources. The following are the national objectives of business:
i) Utilization of resources:- Business utilizes both human and natural resources for the economic development of the country. The factors of production (men, money, material, machine and management) are carefully utilized for the benefit of society and business itself.
ii) Generation of employment:- Generating employment is one of the objectives of business. Business generates employment opportunities for different people at different level on the basis of their skills, knowledge, experience and educational qualifications. Right people should be placed at right job. Business should generate more employment opportunities for the people.
iii) Revenue generation:- Business pays various taxes to the government. These taxes excise duty, income tax, sells tax, custom duty, VAT, clearing charge. Government invests such revenue for the betterment of social work and infrastructure development of the country.
iv) Self -sufficient:- Business utilizes available resources and makes the country self-sufficient in different products. It helps to save foreign currency by minimizing imports. A self-sufficient country has distinct prestige in international level.
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