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What is BUSINESS and What are its OBJECTIVES ?

What is a Business?

          A business is any activity done for the purpose for earning profit.

It involves production or purchase and sale of goods and services to satisfy human needs and wants for earning profits.

Objectives of business

          Even though the main objective of a business is to earn or maximise its profits, it needs to keep its stakeholders happy by meeting their expectations.

1)    Economic objectives:

n Profit maximisation- profit is very important for the growth and survival of the business.

n A business must attain fair position in the market to use the full market potential.

n The business must keep innovating new products. It must try to be the first mover, to bring new technology, products to the customer before their competitors.

n It must use its resources optimally. Reduce wastage. It must efficiently use its resources.

2)    Social objectives:

n The ground of the business is the society and the business uses its resources for the needs and wants of the society and earns profit, thus it’s very important that the business contribute and fulfil its social responsibilities for the prosperity and survival in the long run.

n  The business must supply the goods and services desired by its customers.

n The business must follow fair trade practices. There should be no malpractices or illegal activities that take place with or within the business organisation.

n The business must create employment opportunities for all sections of the society.

n The business must use some of its profits for the improvement of the society, by planting trees, building hospitals, educational institutions etc.

3)    National objectives:

n Business plays a huge role in the development of a nation.

n A business must function under the legal framework of the government, which will contribute towards achievements of the national goals.

n The business must its taxes properly towards the government.

 

Since the main objective of a business is its profit maximisation, have you ever wondered why it’s like that?

Here are some reasons:-

Ø Profit is very important for the survival of the business.

Ø Profit is an indicator for understanding whether the business is growing or not.

Ø Profit helps for the expansion and growth of the business. It keeps the businessmen motivated to work.

Ø Higher profits will increase the reputation of the business.

Ø It is the reward for the efforts put in by the business owner and his employees.

Conclusion

          “Business is a human activity directed towards producing or acquiring wealth through buying and selling of goods”

-- Lewis H Haney




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