Objective of Business

>> August 21, 2011

No human activity takes place without any objective. The business is also one of the most important human activity. So, it must be having its objectives i.e. economic and non economic. Basically, the business is an outcome of the social and human needs of the society. So, the social and human objectives are the main considerations of the business. To achieve these objectives, survival of the business is necessary which is not possible without profit earning, thus, the objective of the business can be categorized as follow:

1. Economic Objectives 

a) Profit earning : Risk bearing is one of the important characteristics of the business. Therefore, it is necessary to earn profits for survival of business. It is an incentive which keeps the entrepreneur busy all the time. Moreover, employees demand for higher wages and better working conditions, investors expect higher rate of return. All these requirements can not be met without adequate profits. The profits are not only necessary for survival, but these are also required for the growth and expansion of business. Thus profit earning is an important objective of business. But the rate of earning profit must be reasonable.

b)  Production of Goods : Every business activity is directed towards the satisfaction of the need and wants of the human beings. To satisfy the needs and wants of the people, the business has to produce the goods according their tastes and fashion.

2. Social Objective

If the profit earning is one of the important objectives of the business on the one hand then, on the other it should satisfy the social needs and wants i.e. by supplying good quality products at genuine price. In the modern society, business occupies a meaningful and significant place in the life of the people.

The social objectives of the business are as follow:

a) Availability of goods : The business should make the necessary goods and services available to the customers to satisfy their different needs and wants at appropriate time. This objective is so important that Govt. is also co-ordination  the business for providing the necessary goods i.e. flour etc. to the people through its public distribution system. The commerce one of the major component of business, makes the goods available to the general public by collecting these from the manufacturing places. Thus to make the goods available to the society is one of the important social objective.

3. Human Objective 

The success of the business mainly depends upon the involvement of the workers, co-operation of the consumers and financial support of the investors. Thus, it is the responsibility of the business to look after the interest of these persons.

The human objectives of the business are as under:

a) Welfare of the workers: The workers are the inseparable part of the business. They are not just the employees of the business but they put in their efforts in the formation of capital. Therefore, the business should pay attention towards the welfare of workers. They should not be considered as machines only. They should be paid wages in accordance with their labor. It has also been experienced that where the workers are provided with incentives such as bonus and additional facilities with regard to health and entertainment etc. the productivity has increased manifolds. So, it should undertake welfare programmes in order to make the workers satisfied with the working conditions. A satisfied worker is an invaluable asset to the business. Thus, it is the duty of the business to look after the welfare of the employees for its own development.

b) Consumers' satisfaction: The consumers are the sources of growth and expansion of the business. So, they should be provided with quality goods at reasonable prices. The special attention should be paid to the tastes and liking of the consumers. Many organisations of the consumers have come up under consumers protection act. The consumers have become vigilant about their rights. Thus, the business should satisfy the consumers with regard to quality, quantity and price. It will be better for the business even in the long run.

c) Satisfaction of shareholders : In the company form of organisation, the management of company should look after the interests of the shareholders i.e. the real owners of the company. The shareholders are widespread all over the country and do not know the managing director or directors of the company. They invest their money in the company on the basis of information received through prospectus and news papers etc. Thus, it is the obligation of the management to distribute fair return to the shareholders on their investments. 


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