By Harshvardhan, the Subject Matter Expert at Edumarz
Solution: An objective is the starting point of business. Objectives are needed in every area that influences the survival and prosperity of business. Since a business has to balance a number of needs and goals, it requires multiple objectives. It cannot follow only one objective and expect to achieve excellence.
Objectives have to be specific in every area and sphere of business. Objectives also enable the business to analyse their own performance and take steps as necessary to improve their performance in future. The major Business Objectives are described as follows.
- Market standing: Increased goodwill and reputation of the business is very important to succeed and prosper. It helps in forming a distinct identity in the market and is referred to as market standing in relation to its competitors. A business enterprise must aim at standing on a stronger footing in terms of offering competitive products at reasonable prices to its customers and serving them to their satisfaction.
- Innovation: Innovation is central to the growth of any business enterprise. It helps businesses to scale up and give a competitive edge to the enterprise in the market. Innovation is defined as an introduction of new ideas or methods in the way something is done or made. However, it does not mean that a new product is to be manufactured. Any modification in the existing product to enhance its operation also denotes innovativeness.
There are two kinds of innovation in every business, i.e.,
a. innovation in product or services
b. innovation in various skills and activities needed to supply products and services. No business enterprise can flourish in a competitive world without innovation. Therefore, innovation becomes an important objective.
- Productivity: Productivity of a business is found by comparing the value of output with the value of inputs. It is used as a measure of efficiency. In order to ensure continued survival and progress, every enterprise must aim at greater productivity through the best use of available resources.
- Physical and financial resources: Any business requires physical resources, like plants, machines, offices, etc., and financial resources i.e. the funds to be able to produce and supply goods and services to its customers. The business enterprise must aim at acquiring these resources according to their requirements and use them efficiently.
- Earning profits: One of the objectives of the 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 so important for its survival and growth.
- Social responsibility: Social responsibility refers to the obligation of business firms to contribute resources for solving social problems and work in a socially desirable manner.