Objectives of Business

Organic Objectives

The first and foremost objective of business are 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 organic objectives of business.

  • 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.
  • 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 business.
  • Prestige and Recognition
    Prestige is the respect and admiration that a business earns due to unfailing services to the society. After growth and diversification, it likes to gain prestige and recognition from society.
  • 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 business.
  • 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 business.

Economic Objectives

Source: www.slideshare.net
Source: www.slideshare.net

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

  • Profit making
    Profit is must for ensuring the survival growth, prestige and stability of the business. No business can survive for long period if it suffers losses for some years.
  • Creation of customers
    Customers are basic for existence, growth and success of business. Business can create customers by satisfying their needs with right quantity of goods and services at the right price, at the right time and at the right place.
  • 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.
  • High productivity
    Productivity is a ratio between inputs used and output obtained. Higher productivity gives better results to the business. Higher productivity of business is reflected in the better quality, low cost of production, and improved competitiveness of business.
  • 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

Source: www.slideshare.net
Source: www.slideshare.net

A business is not only an economic unit, 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.

  • Supply of quality products at fair price
    It is a primary objective of business. A business must be aware of tastes, preferences and needs of its customers to maintain a continuous and adequate supply of quality products and services.
  • 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 with economic objective of business.
  • 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 in anti-social practices like speculation, hoarding adulteration etc.
  • Preservation of environment
    A business exists, operates and grows in an environment. The growth of the 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.
  • 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

Source: www.slideshare.net
Source: www.slideshare.net

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.

  • Fair return to owners
    In every business, 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.
  • 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.
  • 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.
  • Job satisfaction
    Employees motivation is important for productivity and profitability of a business. So, a business must ensure job satisfaction of its employees by making their job inherently interesting, challenging and rewarding.
  • Workers participation
    A 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.
  • Satisfaction of consumers
    It is one of the main objectives of business. A business can ensure the consumers satisfaction by continuously providing them 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 plans programs and policies for fulfilling national interests.

  • 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.
  • Ensuring employment
    Every nation has a duty to create jobs to employ its active population. It has to create a business-friendly environment where business can boundlessly flourish and thereby can create more and more jobs to the increasing population of the country.
  • Development of enterprises
    The economic development of a nation depends on the development of both large-scale and small-scale industries. Since, both the industries are complementary to each other, the growth of larger industries is naturally expected to grow many smaller units around them.
  • Production as per national priorities
    Since a 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 basic necessities of the people.
  • 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 favorable balance payments position.
  • Balanced regional development
    A welfare nation must ensure its balanced regional development. Business helps to achieve balanced regional development by investing and utilizing local resources available even in backward and remote areas of the country.


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.

  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.
  • __________are the examples of Manufacturing Industry.

    Assembling Industry
    Processing Industry
    Synthetic Industry
  • Those industries engaged in farming,fishing,oil extraction and all other firms that extract natural resources so that can be used and produced by other business are called ______________.

    Analytical Industry
    Primary industry
    Construction Industry
    Secondary Industry
  • Those industries on which plants and animals are reproduced for generating value are called _______Industry.

    Extractive Industry
    Analytical Industry
    Processing Industry
    Genetic Industry
  • ____________are the examples of Extractive Industry.

  • The industries which are involved in the construction developmental of works are called _________.

    Genetic Industry
    Primary Industry
    Construction Industry
    Extractive Industry
  • __________are the examples of Assembling Industries.

    Photocopy Paper
  • __________are the examples of Analytical Industries.

  • You scored /7

    Take test again

Any Questions on Objectives of Business ?

Please Wait...

No discussion on this note yet. Be first to comment on this note