Business Organization

Objective of Business Easy Notes-2022

MDU BBA NOTES

SEMESTER-1

Business Organisation

Objective of Business

Business objectives also need to be aimed at contributing to national goals and aspirations as well as to international well–being. Thus, the objectives of business may be classified as:-

A. Economic Objectives

Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which includes, the creation of customers, regular innovations, and the best possible use of available resources.

Economic Objectives based on economic activities:-

Profit Earning

Profit is the lifeblood of business, without which no business can survive in a competitive market. In fact, profit-making is the primary objective for which a business unit is brought into existence. Profits must be earned to ensure the survival of the business, its growth, and its expansion over time.

Profits help businessmen not only to earn their living but also to expand their business activities by reinvesting a part of the profits. In order to achieve this primary objective, certain other objectives are also necessary to be pursued by the business, which is as follows:-

Creation of customers

A business unit cannot survive unless there are customers to buy the products and services. Again a businessman can earn profits only when he/she provides quality goods and services at a reasonable price. For this, it needs to attract more customers for its existing as well as new products. This is achieved with the help of various marketing activities.

2. Regular innovations

Innovation means changes, which bring about improvement in products, the process of production, and the distribution of goods. Business units, through innovation, are able to reduce costs by adopting better methods of production and also increase their sales by attracting more customers because of improved products.

Reduction in cost and increase in sales gives more profit to the businessmen. The use of power looms in place of handlooms, the use of tractors in place of hand implements in farms, etc. are all the results of innovation.

3. Best possible use of resources

As we all know, to run any business we must have sufficient capital or funds. The amount of capital may be used to buy machinery, and raw materials, employ
men and have the cash to meet day–to–day expenses. Thus, business activities require various resources like men, materials, money, and machines. The availability of these resources is usually limited.

Thus, every business should try to make the best possible use of these resources. Employing efficient workers. Making full use of machines and minimizing the wastage of raw materials,
can achieve this objective.

B. Social Objectives

Social objectives are those objectives of the business, which are desired to be achieved for the benefit of society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its
welfare. No activity of the business should be aimed at giving any kind of trouble to society.

Social Objectives based on Social activities:-

Production and Supply of Quality Goods and Services

Since the business utilizes the various resources of society, society expects to get quality goods and services from the business the objective of business should be to produce better quality goods and supply them at the right time and at the right price It is not desirable on the part of the businessman to supply adulterated or inferior goods which cause injuries to the customers.

Adoption of Fair Trade Practices

In every society, activities such as hoarding, black-marketing, and over-charging are considered undesirable. Besides, misleading advertisements often give a false impression about the quality of products. Such advertisements deceive the customers and businessmen use them for the sake of making large profits.

Contribution to the General Welfare of the Society

Business units should work for the general welfare and upliftment of society. This is possible through the running of schools and colleges better education opening of vocational training centers to train people to earn their livelihood, establishing hospitals for medical facilities, and providing recreational facilities for the general public like parks, sports complexes, etc

C. Human Objectives

Human objectives refer to the objectives aimed at the well–being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped, and deprived of proper education and training. The human objectives of business may thus include the economic well–being of the employees,
social and psychological satisfaction of employees and the development of human resources.

Human Objectives based on human activities:-

Economic Well–being of the Employees

In business, employees must be provided with tan remuneration and incentive for performance benefits of provident fund, pension, and other amenities like
medical facilities, housing facilities, etc. Through this, they feel more satisfied at work and contribute more to the business.

Social and Psychological Satisfaction of Employees

It is the duty of business units to provide social and psychological satisfaction to their employees. This is possible by making the job interesting and challenging, putting the right person in the right job, and reducing the monotony of work Opportunities for promotion and advancement in career should also be provided to the employees.

Development of Human Resources

Employees as human beings always want to grow. Their growth requires proper training as well as development. Businesses can prosper if the people employed can improve their skills and develop their abilities and competencies in course of time. Thus, it is important that businesses should arrange training and development programs for their employees.

The well-being of Socially and Economically Backward People

Business units being inseparable parts of society should help backward classes and also people who are physically and mentally challenged. This can be done in many ways. For instance, a vocational training program may be arranged to improve the earning capacity of backward people in the community.

D. National Objectives

Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations. The goal of the country may be to provide employment opportunities to its citizen, earn revenue for its exchequer, become self–sufficient in the production of goods and services, promote social justice, etc.

The following are the national objectives of the business:-

Creation of Employment

One of the important national objectives of the business is to create opportunities for the gainful employment of people. This can be achieved by establishing new business units, expanding markets, widening distribution channels, etc.

Promotion of Social Justice

As a responsible citizen, a businessman is expected to provide equal opportunities to all persons with whom he/she deals. He/ She is also expected to provide equal opportunities to all the employees to work and progress. Toward these objectives, special attention must be paid to weaker and backward sections of society.

Production According to National Priority

Business units should produce and supply goods in accordance with the priorities laid down in the plans and policies of the government. One of the national objectives of business in our country should be to increase the production and supply of essential goods at reasonable prices.

Contribute to the Revenue of the Country

Business owners should pay their taxes and dues honestly and regularly. This will increase the revenue of the government, which can be used for the development of the nation.

Self–sufficiency and Export Promotion

To help the country to become self–reliant, business units have the added responsibility of restricting the import of goods. Besides, every business unit should aim at increasing exports and adding to the foreign exchange reserves of the country.

E. Global Objectives

Previously India had a very restricted business relationship with other nations. There was a very rigid policy for the import and export of goods and services. But, nowadays due to liberal economic and export–import policies, restrictions on foreign investments have been largely abolished, and duties on imported goods have been substantially reduced.

The following are the Global Objectives of the business:-

Raise the General Standard of Living

The growth of business activities across national borders makes quality goods available at reasonable prices all over the world. The people of one country get to use similar types of goods that people in other countries are using. This improves the standard of living of people.

Reduce Disparities among Nations

Businesses should help to reduce disparities between the rich and poor nations of the world by expanding its operation. By way of capital investment in developing as well as underdeveloped countries it can foster their industrial and economic growth.

Make Available Globally Competitive Goods and Services

Businesses should produce goods and services which are globally competitive and have huge demand in foreign markets. This will improve the image of the exporting country and also earn more foreign exchange for the country.

MDU BBA NOTES

SEMESTER-1

Business Organisation

Objective of Business