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Business objectives and stakeholders

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Year 12 AS Business studies Business objectives and stakeholders Business Objectives * The objectives of a firm means the goals of the business i.e. what the business wants to achieve. * The objectives of business organisations will be shaped by the various stakeholders in the business. Those with the most influence will tend to set the objectives. * It is important for a business to have well defined objectives. These will help the business to be clear about what it wants to achieve. * For example, Mission Statements * These are descriptions of the overall aims of the business and its short term and long term objectives. * They tend to be aimed at all stakeholders and may be printed in the Annual Report and Accounts. * However, they often focus on meeting the needs of the customers, identifying the specific services to be provided. Survival There are 3 times when a business, regardless of their size and status will consider survival important: * Early stages of trading- Most firms begin on a small scale, establish themselves and then grow. ...read more.


* Lack of experience which can often lead to mistakes * A lack of resources * Competition from established firm * Unforeseen problems such as unexpected costs * Limited recognition by customers Profit maximisation is achieved where the difference between the total revenue earned by the business from sellngit6s produces and the total costs of the products is the greatest. It is obvious a business will aim to make as much profit as possible but in reality a business is likely to produce a satisfactory level of profit as an objective and this is known as satisficing. Many businesses objective is growth; it is argued firms must grow in order to survive. Growth is measured in the total revenue earned. Failure to grow might result in a loss of competitiveness, a decline and an eventually closure. If a firm is able to grow and dominate the market in the future it may be able to enjoy some monopoly power and raise its price. ...read more.


Some companies have made serious efforts to improve their own image such as Skoda, the car manufacturer has in the past had an image as a producer of 'budget', 'downmarket', or 'unfashionable' cars. It has tried to shake off this image by exploiting its new owner's name, VW. Faced with competition, firms are likely to lose sales if they don't take into account the needs of customers. Increasingly, firms are giving free after sales service, replacing unwanted goods without question and training their staff to deal with the public Government legislation and arguably trade unions have influenced how businesses treat their employees. A number of laws have been passed to protect workers. An example of legislation which affects workers is the disability discrimination act 1996. this is designed to reduce discrimination by businesses against disable workers. One effect of legislation is that it protects companies with high standards of responsibility from those competitors who have little regard for health and safety at work. Unscrupulous firms will not be able to lower costs by neglecting health and safety as they will have to keep within the law. ...read more.

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