Objectives of Business

Organic Objectives

The first and foremost objective of the business is to survive. It seeks to achieve growth and expansion. Then, it further tries to achieve efficiency, stability, recognition prestige, and goodwill. The set of this objective is known as the organic objectives of a business.

1. Survival
   For existence and stability, survival is the first motive of a business. It is concerned with maintaining its earning capacity, competitive position, and market share.
   
   
2. Growth and Diversification
   Once the survival is ensured business seeks to achieve growth, expansion, and diversification of its activities. The growth, expansion, and diversification contribute to gain higher profits and longer life of the business.
   
   
3. Prestige and Recognition
   Prestige is the respect and admiration that a business earns due to unfailing services to society. After growth and diversification, it likes to gain prestige and recognition from society.
   
   
4. Organizational Efficiency
   Efficiency is the quality of doing something well with no waste of time and resources. Efficiency is a means by which the survival, growth, and diversification of business can be achieved. Therefore, efficiency is a vital objective of the business.
   
   
5. Stability
   Stability is a state of business in which it is steady and not much disturbed by an untoward incidence. After a business wins respect and recognition, it wants to maintain these forever. Thus, seeking stability is another organic objective of the business.

Economic Objectives

A business is primarily an economic unit so it must have some economic objectives to pursue. These economic objectives are stated below:

1. Profit-making
   Profit is a must for ensuring the survival growth, prestige, and stability of the business. No business can survive for a long period if it suffers losses for some years.
   
   
2. Creation of Customers 
   Customers are basic for the existence, growth, and success of the business. Businesses can create customers by satisfying their needs with the right quantity of goods and services at the right price, at the right time and at the right place.
   
   
3. Innovation
   Innovation is concerned with introducing new products, new material, new production and distribution methods and a new market for satisfying the changing needs of the customers.
   
   
4. High Productivity
   Productivity is a ratio between inputs used and the output obtained. Higher productivity gives better results for the business. Higher productivity of the business is reflected in the better quality, low cost of production, and improved competitiveness of a business.
   
   
5. Increasing Market Share
   Business must outshine its competitors in every aspect of quality, availability, and price of goods and services. It must improve its quality of goods and services, reduce its price and improve the distribution system in order to maintain its market standing.

Social Objectives

A business is not only an economic unit, but it is also a social institution. So, a business must set its social objectives. There are some social obligations that a business must try to fulfill.

1. Supply of Quality Products at a Fair Price
   It is a primary objective of the business. A business must be aware of the tastes, preferences, and needs of its customers to maintain a continuous and adequate supply of quality products and services.
   
   
2. Creation of Employment Opportunity
   Since a business is a social institution, it must create an employment opportunity for the members of the society. Sometimes, this social objective may contradict the economic objective of a business.
   
   
3. Refrain From Anti-social Practices
   A business has to earn the legitimate profit by showing decent behavior to its customers, suppliers, competitors and other stakeholders. It must not involve anti-social practices like speculation, hoarding adulteration, etc.
   
   
4. Preservation of Environment
   A business exists, operates and grows in an environment. The growth of modern business has caused problems of pollution and environmental degradation. So, a business must be aware of the environmental problems and try to protect and preserve the environment by taking appropriate control measures.
   
   
5. Community and Social Service
   A business must establish a cordial relationship with the local community where it exists and operates. It is expected to serve the local community by involving itself in some charitable and social activities to build its public image and goodwill.

Human Objectives

A business is also a human organization where numbers of people are directly or indirectly involved in it to pursue their individual goals. Owners own it, employees and workers work in it, suppliers supply it and consumers buy it and so on. All these people make a valuable contribution to make a business a success.

1. Fair Return to Owners
   In every business, the owner invests their capital in an expectation that it will provide them some returns. So, a business must try to pay fair returns to the owner’s capital.
   
   
2. Fair Compensation to Employees
   Employees are the vital assets of a business. The success of a business largely depends on their hard work and efficiency. So they must be fairly compensated for what they deserve.
   
   
3. Welfare of Employees
   Since the employees put their heart and soul to make a business successful, it must honor the dignity of labor and treat them as partners rather than as simply working hands.
   
   
4. Job Satisfaction
   Employee motivation is important for the productivity and profitability of a business. So, a business must ensure the job satisfaction of its employees by making their job inherently interesting, challenging and rewarding.
   
   
5. Workers Participation
   Management can also motivate its employees to perform well by ensuring their participation in decision-making. Workers' participation does not only reduce their grievances but also improves cordial relations between employers and employees.
   
   
6. Satisfaction of Consumers
   It is one of the main objectives of the business. A business can ensure the consumers' satisfaction by continuously providing the right quality goods and services at the right price at the right time and at the right place.

National Objectives

Business is an integral part of the nation. So, it must have some objectives to pursue in the interest of the nation of which it is a part. A business must act as an instrument for implementing the national plan's programs and policies for fulfilling national interests.

1. Utilization of Natural Resources
   Every country is endowed with natural resources which are essential for its development. A business must try to properly utilize the indigenous resources which not only reduce imports but also save foreign exchange.
   
   
2. Ensuring Employment
   Every nation has a duty to create jobs to employ its active population. It has to create a business-friendly environment where businesses can boundlessly flourish and thereby can create more and more jobs to the increasing population of the country.
   
   
3. Development of Enterprises
   The economic development of a nation depends on the development of both large-scale and small-scale industries. Since both industries are complementary to each other, the growth of larger industries is naturally expected to grow many smaller units around them.
   
   
4. Production as per National Priorities
   Since business is an instrument for national development, it has to produce such goods and services as needed by the nation. It has to produce goods and services to meet the basic necessities of the people.
   
   
5. National Self-sufficiency and Export Promotion
   Generally, a business is supposed to produce and sell those goods and services which help to substitute imports and promote exports. So, a business can ensure national self-sufficiency and contribute to attaining a favorable balance payments position.
   
   
6. Balanced Regional Development
   A welfare nation must ensure its balanced regional development. The business helps to achieve balanced regional development by investing and utilizing local resources available even in backward and remote areas of the country.

References:

Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.

Things to remember

1. The term 'business ‘refers to all the economic activities carried on by people and organizations for generating incomes.
2. The traditional concept explains that the business of business is to earn profit through production and marketing of products.
3. Consumer satisfaction is the central point of the Modern concept of business. 
4. Business is an integral part of the nation. So, it must have some objectives to pursue in the interest of the nation of which it is a part.

• It includes every relationship which established among the people.
• There can be more than one community in a society. Community smaller than society.
• It is a network of social relationships which cannot see or touched.
• common interests and common objectives are not necessary for society.

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