State and explain five objectives of business.
Or
Why does business need multiple objectives ? Explain any five such objectives ?
Continuous increase in the profits of any enterprise
is possible only by performing useful services to the society. Infact, objectives are needed in every area that influences the survival and prosperity of busi¬ness. Since a business has to balance a number of needs and goals, it requires multiple objectives.
The five multiple objectives of business are as follows:
- Market standing : Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise must aim at stronger market standing in terms of offering competitive products to its customers and serving them to their satisfaction.
- Innovation : Innovation is the introduction of new ideas or methods in the way something is done or made. There are two kinds of innovation in every business, i.e.,
(i) innovation in product or service.
(ii) innovation in the various skills and activities needed to supply them. - Productivity : Productivity is calculated by comparing the value of outputs with the value of inputs. It is used as a measure of efficiency.
- Physical and financial resources : Any business requires physical resources like plants, machines, offices, etc., and financial resources i.e. funds to be able to produce and supply goods and services to its
customers. - Earning profits : One of the main objectives of business is to earn profits on the capital employed.
Profitability refers to profit in relation to capital investment. Every business must earn a reasonable profit which is crucial for its survival and growth