Business and stakeholder objectives

• Business aims


  The long-term aspirations of an organisation
• Business objectives


  Specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that must be achieved to realise business aims
• Every successful business needs to have clear aims and objectives that guide its operations and focus the efforts of all employees towards the same goal
• Aims and objectives are critical for businesses to function effectively and achieve long-term success
• The Most Common Business Objectives

  • Survival
  • Growth
  • Profit
  • Market Share
• Survival


  A common objective in the early stages of trading
• Growth


  Businesses often achieve growth by increasing sales, persuading customers to buy products more often or in greater quantities, and appealing to new market segments
• Profit


  Ensuring sales revenue received is greater than business costs, allowing for financial security
• Market Share


  The percentage of the total market revenue that a single business or brand achieves
• As businesses grow, their objectives often change over time, e.g. they may shift from survival and break-even to growth and profit maximisation
• Objectives of Social Enterprises

  • Social: to provide jobs and support for disadvantaged groups in society
  • Environmental: to protect the environment
  • Ethical: to operate the business in a responsible way
  • Financial: to make a profit to invest back into the social enterprise to expand the social work that it performs
• Butterfly Books is a social enterprise that publishes children's educational books in the UK, with the aim of working to educate, inspire and entertain children, aiming to change future generations by reducing gender bias in job roles
• Differences in Private & Public Sector Business Objectives

  • Public Sector Objectives: to provide a service to the local community, social objectives, financial objectives to provide a return back to the government
  • Private Sector Objectives: profit maximisation, growth, increase shareholder returns, increase market share, survival, provide a service to the community
• Objectives of Stakeholder Groups

  • Owners (shareholders): to maximise returns on investment
  • Employees: to earn a living, have job security and be compensated fairly
  • Managers: to meet the company's goals and objectives, maximise profits and minimise costs
  • Suppliers: to sell their products or services and make a profit
  • Customers: to receive high-quality products or services at a fair price
  • Pressure groups: to promote a specific cause or agenda
  • The local community: for the business to have a positive impact
  • The government: to promote the public good and protect the interests of citizens
• If a business experiences financial difficulties, shareholders may lose value in their investments and employees may face job losses or pay cuts
• If a business is profitable, shareholders may benefit from increased dividends and employees may receive bonuses or promotions
• Customers can be affected by business activity in terms of product availability, quality, and pricing
• The local community can be impacted by the environmental and social impact of business operations, such as pollution or job creation
• The government can be affected by business activity in terms of tax revenue and regulatory compliance (following the laws)
• Stakeholders can impact business activity through their purchasing decisions, productivity, investment decisions, regulations, and social pressure
• Stakeholder groups can have conflicting interests and objectives, which can lead to tensions and conflicts