Objectives of Business

Objectives of Business

A business does not exist for a single narrow purpose; it pursues a set of objectives that are usually grouped under two broad heads: economic objectives and social objectives.

Economic objectives — the goals directly connected to the survival and financial health of the business itself:

1. Earning profit — the foremost economic objective; profit rewards the risk taken and provides the funds needed for the business to survive, replace worn-out assets, and expand.
2. Creation of customers — a business survives only if it continually creates and retains customers who are willing to buy what it offers; without customers, no amount of production has any value.
3. Innovation — continually improving products, processes, and methods of doing business to stay ahead of competitors and better satisfy changing customer wants.
4. Optimum utilisation of resources — using the capital, labour, material, and time available as efficiently as possible, to minimise waste and cost.
5. Survival and growth — beyond a single period's profit, every business aims to survive over the long run and, ideally, to grow in scale, market share, and profitability.

Social objectives — the goals connected to the business's responsibility toward the wider society it operates within:

1. Supplying quality goods and services at fair/reasonable prices — meeting genuine consumer needs honestly, without exploiting scarcity or misinformation.
2. Fair dealing with all stakeholders — honest and ethical treatment of employees, suppliers, customers, and competitors alike.
3. Generating employment — providing livelihoods to the people the business employs, directly and indirectly.
4. Contributing to the welfare of society — through fair wages, safe working conditions, contribution to public revenue via taxes, and increasingly, through voluntary community and environmental initiatives.
5. Avoiding unfair/restrictive trade practices — not indulging in hoarding, black-marketing, adulteration, or misleading advertising, all of which harm consumers and the wider market.