OBJECTIVES OF BUSINESS

1. What are the objectives of business? Explain.
A. A business is an activity directed towards providing or acquiring wealth through buying and selling of goods. A business activity involves production, exchange of goods & services to earn a living.


Characteristics of Business:


1. Entrepreneur: There must be someone to take initiative for establishing a business.
2. Economic Activities: Business include only Economic activities.
3. Exchange of Goods & Services: A business must involve exchange of goods and services.
4. Profit Motive: The profit motive is an important element of business.
5. Risk and Uncertainity: The business involves a large element of risk & uncertainity.
6. Continuity of Transactions: In business, only these transactions are included which have regularly and continuity.
7. Creation of utility: Business creates various types of utilities in goods so that consumer may use them.


Definition:


"Business may be defined as human activities directed towards providing or a acquiring wealth through buying and selling goods."
- L. H. Haney.


"Business may be defined as an activity in which different persons exchange something of value, whether goods or services, or mutual 
gain or profit."
- By Peterson & Plowman.


Objectives of the Business:


The objectives of the business may be categories under fine headings.


a) Economic Objection
b) Human Objectives
c) Social Objectives
d) Organic Objectives
e) National Objectives


A. Economic Objectives:


1. Profit Earning: It cannot be desired that business is started for earning profits, profit is the basic incentive to business pursuit profits are needed to face various uncertainities.
2. Production of goods: The next objective is to produce more goods & sell them to the consumers. The producers estimate the demand for goods and produce accordingly.
3. Creating Marketing: Marketing covers all these activities which relate to the creation of time, place and possession utility. The near markets are exploited to keep a steady demand for goods. An enterprise cannot exist without finding out new markets for the product.


B. Human Objectives:


1. Welfare of Employees: The employees should be look upon as human beings. The employees of an enterprise help in increasing the profitability and they should also be given a due share in profits. It may be in the form of bonus, increased allowances or spending money on their welfare.
2. Satisfaction of consumers: The consumers should be provided quality goods at reasonable prices. The business is meant for consumers and their satisfaction should be the main objective of the business.
3. Satisfaction of Share holders: The management should give reasonable returns on the money invested by the share holders. The shareholders should also feel that their money is not misused by the management.


C. Social Objectives or Social responsibility of the business:


The business has 2 aspects:


(i) Individual and
(ii) Social


Profit motives can be counted as individual aspect. The social responsibilities of business can be studied as follows,


1. Availibility of Goods: The business should ensure the supply of goods to meet the requirements of the society. The business should estimate the total demand for various commodities and adjust the production accordingly.
2. Supply of Quality Goods: The supply of quality goods and services to consumers at reasonable price is the responsibility of the business. A business cannot flourish in the long run if it ignores consumers. It is the duty of he business to study the wants and needs of the consumers and provide them with quality goods at reasonable prices.
3. Co-operation with the government: Business should co-operate with the government in helping it to achieve the objectives of socialistic pattern of society. The business community should adopt a positive approach towards policies of the government and should help it in solving national problems.
4. Creating more employment: The business can help the society by creating more and more job opportunities. The business community should plough back its profit for further expansion of business activities which will ultimately create new job opportunities.


D. Organic Objectives:


1. Survival: The first objective of business is to survive. It has to ensure that only those activities are taken up which are beneficial to the society.  A losing concern cannot survive for long.
2. Growth: A business unit tries to utilize its resources properly so that it is able to plough back its profits for further expansion and diversification. A number of plans and policies should be framed to facilitate future growth of every unit.
3. Earn recognition and prestige:  A business enterprise always aims to get recognition from those with when it deals. This is possible only if it serves them well. It should have good rapport with the supplier, dealers ad consumers. All these acts earn goodwill for the enterprise and its prestige will enhance.


E. National Objectives:


1. Helping National Efforts: A business aims at helping the national efforts of improving economic position of the society. The business should enter those fields of industrial activity, which remained neglected so far. It is the duty of the business entrepreneurs to produce goods on the basis of needs and not on the basis of profit margin.
2. Development of small-entrepreneurs: Big business houses should help in the development of small-undertakings. They should not treat small scale units as their competitors.
3. National self-sufficiency & export development: Business can play important role in making the country self-reliant. It should produce all those goods which are imported from outside. A self-reliant nation has more prestige in international community.
4. Development of skilled personnel: Every country needs trained and skilled personnel for the development of its industry. Business houses can provide technical knowledge and training to their employees. This helps in skill formation for the country's growth and  development.