Q.What are the economic objectives of business? Explain briefly.

An objective is the starting point of a business — all that business people want in return for what they do. It is commonly believed that business exists only for profit, since every firm tries to earn the excess of revenue over cost. Profit certainly matters: it is a source of income and of finance for expansion, it indicates efficient working, it reflects society's approval of the firm's utility, and it builds reputation.

But a business is part of society and must pursue multiple objectives to survive and prosper. Over-emphasising profit alone is dangerous — it can lead managers to neglect customers, employees, investors and society, inviting opposition that may cost the business its profit altogether. Objectives are therefore needed in every key area:

• Market standing — the firm's position relative to competitors, held by offering competitive, reasonably priced products.
• Innovation — introducing new ideas or methods, whether in products/services or in the skills to supply them; even improving an existing product counts. It is central to growth and gives a competitive edge. …