Table of Contents
Business objectives are the goals or aims that a business wants to achieve. Stakeholders are groups or individuals who have an interest in the business and are affected by its performance. Different stakeholders may have conflicting objectives.
Common Business Objectives #
- Profit
- Profit is the money a business earns above its costs
- It’s a key objective as it allows the business to survive, grow, and provide returns to owners
- Adding Value
- Value added is the difference between the price of a product and the cost of materials used to make it
- Businesses can add value by improving existing products, creating new ones, or providing additional services
- Growth
- Business growth occurs when a company increases its sales, market share, or expands into new markets
- Growth is enabled by customer satisfaction and can lead to higher profits and job creation
- Larger businesses benefit from economies of scale – lower average costs from producing at high volumes
- Survival
- For a business to continue operating, it must survive in the short term – especially crucial for startups
- Business failure means the owners can lose their investments
- Providing a Service
- Some businesses, especially government-run ones, aim to provide essential services to the community
- Profitability may be less important than serving public needs
Types of Stakeholders #
Stakeholders can be divided into two main groups based on what they seek from the business:
Financial Stakeholders (Profit-Oriented) #
- Owners: Seek return on investment and business growth to increase value of their stake
- Employees: Desire high wages, job security, and satisfaction from their work
- Managers: Want high salaries, secure positions, and the status and authority of their roles
Non-Financial Stakeholders (Value-Oriented) #
- Customers: Expect quality products, good value, and reliable post-purchase support
- Government: Seeks job creation, tax revenue, and economic growth from business activity
- Local Community: Benefits from employment opportunities, socially responsible business practices, safe products, and corporate contributions to the area
