Objectives of Business

An objective is the starting point of business: every business is directed toward achieving certain objectives, which are simply all that business people want to get in return for what they do.

Is profit the only objective?

• It is generally believed that business is carried on only for profit, and business persons themselves say their primary objective is to produce or distribute goods and services for profit — every business being an attempt to get more than what is spent or invested, that is, to earn profit, the excess of revenue over cost.
• But it is increasingly realised that business enterprises are part of society and must fulfil several objectives, including social responsibility, to survive and prosper in the long run. Profit is a leading objective, but not the only one.

Why profit still matters

Even though profit cannot be the only objective, its importance cannot be ignored. Profit is an essential objective for several reasons:

• it is a source of income for business persons;
• it can be a source of finance for meeting the expansion needs of the business;
• it indicates the efficient working of the business;
• it can be taken as society's approval of the utility of the business; and
• it builds the reputation of a business enterprise.

The danger of over-emphasising profit

• Putting too much emphasis on profit, to the exclusion of other objectives, can be dangerous. Managers obsessed with profit may neglect their responsibilities toward customers, employees, investors and society, and may even exploit sections of society for immediate gain. …