Business Aims and Objectives 1.5

Flashcards covering Aims and Objectives, Stakeholders, and Business Activities.

Aims

The long-term objective of the business, aiming to become the biggest in its sector. Should be SMART: Specific, Measurable, Achievable, Realistic, and Timed.

Objectives

A short or medium-term target of a business, needed to reach its aim. For example, increasing sales by 20% in the next 5 years.

Aims of For-Profit Organizations

Survival, profit maximization, increase sales revenue, increase market share, growth, improve reputation, improve quality, environmental aims, provide jobs.

Aims of Not-For-Profit Organizations

To serve the community, ethical aims, environmental objectives, provide services, avoid wasteful duplication, control industries, prevent exploitation, help people in need.

Why Businesses Remain Small

Owners content to operate small, low cost structure, serve niche markets, services delivered effectively on a small scale, consumers like specialist suppliers, quick adaptation.

Stakeholders Definition

Individuals and organizations affected by the decisions and actions of a particular business.

Stakeholders: Customers

Best product quality; may not buy the product if not satisfied.

Stakeholders: Workers

Fair treatment, pay, conditions; hard working and skillful

Stakeholders: The Government

Payment of taxes and adhering to laws.

Stakeholders: Pressure Groups

Ethical sourcing, treatment of workers/environment.

Stakeholders: Local Community

Impact of pollution/congestion

Stakeholders: Suppliers

Prompt payment/ethical treatment.

Stakeholders: Lenders/Investors/Owners

Effect of decisions on the business. Repayment of debts/interest.

Internal vs External Stakeholders

External stakeholders include shareholders, creditors, customers, government and society; Internal stakeholders include employees, managers, and owners