Business Objectives: 5 Most Important Objectives of Business (2023)

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Five most important objectives of business may be classified are as follows: 1. economic objectives, 2. social objectives, 3. human objectives, 4. national objectives, 5. global objectives.

Objectives represent the purpose for which an organisation has been started. Objectives guide and govern the actions and behaviour of businessmen. According to William F. Glueck, “Objectives are those ends which the organisation seeks to achieve through its existence and operations.”

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Another term for objectives is goals. Logically, objectives ought to specify ends or results sought that are derived from and congruent with the mission the organization has set itself Attempts to set objectives should always be guided by references to the mission they are meant to fulfill.

Business objectives are something which a business organisation wants to achieve or accomplish over a specified period of time. These may be to earn profit for its growth and development, to provide quality goods to its customers, to protect the environment, etc.

Classification of Objectives of Business:

It is generally believed that a business has a single objective. That is, to make profit. But it cannot be the only objective of business. While pursuing the objective of earning profit, business units do keep the interest of their owners in view. However, any business unit cannot ignore the interests of its employees, customers, the community, as well as the interests of society as a whole.

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For instance, no business can prosper in the long run unless fair wages are paid to the employees and customer satisfaction is given due importance. Again a business unit can prosper only if it enjoys the support and goodwill of people in general. Business objectives also need to be aimed at contributing to national goals and aspirations as well as towards international well-being. Thus, the objectives of business may be classified as;

A. Economic Objectives

B. Social Objectives

C. Human Objectives

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D. National Objectives

E. Global Objectives

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Now, we shall discuss all these objectives in detail.

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 include, creation of customers, regular innovations and best possible use of available resources.

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(i) 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 business, its growth and 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 business, which are as follows:

(a) Creation of customers:

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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.

(b) Regular innovations:

Innovation means changes, which bring about improvement in products, process of production and distribution of goods. Business units, through innovation, are able to reduce cost 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. Use of power looms in place of handlooms, use of tractors in place of hand implements in farms etc. are all the results of innovation.

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(c) 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, raw materials, employ men and have cash to meet day-to-day expenses. Thus, business activities require various resources like men, materials, money and machines.

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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 wastage of raw materials, can achieve this objective.

B. Social Objectives:

Social objective are those objectives of business, which are desired to be achieved for the benefit of the 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 the society.

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If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later. Social objectives of business include production and supply of quality goods and services, adoption of fair trade practices and contribution to the general welfare of society and provision of welfare amenities.

(i) Production and Supply of Quality Goods and Services:

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

They should charge the price according to the quality of e goods and services provided to the society. Again, the customers also expect timely supply of all their requirements. So it is important for every business to supply those goods and services on a regular basis.

(ii) 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 the businessmen use them for the sake of making large profits.

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This is an unfair trade practice. The business unit must not create artificial scarcity of essential goods or raise prices for the sake of earning more profits. All these activities earn a bad name and sometimes make the businessmen liable for penalty and even imprisonment under the law. Therefore, the objective of business should be to adopt fair trade practices for the welfare of the consumers as well as the society.

(iii) Contribution to the General Welfare of the Society:

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

С. 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 economic well-being of the employees, social and psychological satisfaction of employees and development of human resources.

(i) 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. By this they feel more satisfied at work and contribute more for the business.

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(ii) 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.

Further, grievances of employees should be given prompt attention and their suggestions should be considered seriously when decisions are made. If employees are happy and satisfied they can put then best efforts in work.

(iii) Development of Human Resources:

Employees as human beings always want to grow. Their growth requires proper training as well as development. Business 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 business should arrange training and development programmes for its employees.

(iv) Well-being of Socially and Economically Backward People:

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Business units being inseparable parts of society should help backward classes and also people those are physically and mentally challenged. This can be done in many ways. For instance, vocational training programme may be arranged to improve the earning capacity of backward people in the community. While recruiting its staff, business should give preference to physically and mentally challenged persons. Business units can also help and encourage meritorious students by awarding scholarships for higher studies.

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 opportunity to its citizen, earn revenue for its exchequer, become self-sufficient in production of goods and services, promote social justice, etc. Business activities should be conducted keeping these goals of the country in mind, which may be called national objectives of business.

The following are the national objectives of business.

(i)Creation of Employment:

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

(ii) Promotion of Social Justice:

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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. Towards this objectives special attention must be paid to weaker and backward sections of the society.

(iii) 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.

(iv) Contribute to the Revenue of the Country:

The 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.

(v) Self-sufficiency and Export Promotion:

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

E. Global Objectives:

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

This change has brought about increase in competition in the market. Today because of globalisation the entire world has become a big market. Goods produced in one country are readily available in other countries. So, to face the competition in the global market every business has certain objectives in mind, which may be called the global objectives. Let us learn about them.

(i) Raise General Standard of Living:

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.

(ii) Reduce Disparities among Nations:

Business should help to reduce disparities among 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.

(iii) Make Available Globally Competitive Goods and Services:

Business 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.

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FAQs

What is the most important objectives of a business? ›

The main objective of any business is to earn a profit. Just as a plant cannot survive without water, similarly a business cannot sustain without profit. Profit is necessary for growing and expanding business activities.

What are the 4 main objectives of a business? ›

Objectives of Business – Profitability, Growth, Stability, Efficiency and Survival. Business means busy in some activities. Business means conducting activities such as – sale, purchase and manufacturing etc for profit and growth.

What are the 5 objectives of business class 11? ›

The following five objectives of the business are productivity, earning profits, market standing, physical and financial resources, and innovation.

What are the 2 main business objectives? ›

The main objectives that a business might have are: Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis. Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders.

What are the 6 main business objectives? ›

6 examples of objectives for a small business plan
  • Becoming and staying profitable.
  • Maintaining cash flow.
  • Establishing and sustaining productivity.
  • Attracting and retaining customers.
  • Developing a memorable brand.
  • Reaching and growing an audience through marketing.
  • Planning for growth.
14 Jan 2022

What is the importance of objective? ›

Objectives help define goals, identify conflicting activities, guide elements of the decision-making process, and ensure accountability of personnel within an organization. Without clearly defined goals and supporting objectives, goal displacement often occurs.

What are the 8 business objectives? ›

Having a comprehensive list of business objectives creates the guidelines that become the foundation for your business planning.
  • Getting and Staying Profitable. ...
  • Productivity of People and Resources. ...
  • Excellent Customer Service. ...
  • Employee Attraction and Retention. ...
  • Mission-driven Core Values. ...
  • Sustainable Growth.

What are the 3 types of objectives? ›

Types of Objectives
  • Cognitive.
  • Psychomotor.
  • Attitudes.
11 Sept 2018

What are objectives of a business? ›

Business objectives are the specific, measurable results that companies hope to maintain as their organisation grows. When you create a set of business objectives, you focus on specifics. This means analysing, assessing, and understanding where you are now and where you want to be in the future.

What is Chapter 5 in Business Plan? ›

This chapter describes the purposes of business planning, the general concepts related to business planning, and guidelines and a format for a comprehensive business plan.

What are the five social objectives of business? ›

Social objectives of business include production and supply of quality and standard goods and services, adoption of fair-trade practices and contribution to the general welfare of society and provision of welfare amenities.

What are the importance of a business? ›

Business improves the quality of life in two ways. Firstly, it provides high-quality goods and service to the people required for their enjoyment, comfort, and health. Secondly, a business offers employment opportunities to the people by which they can generate income and improve the quality of life.

What are the 7 main business objectives? ›

What are the seven business objectives?
  • Profit maximisation.
  • Sales maximisation.
  • Revenue maximisation.
  • Surviving in the market.
  • Satisficing principle.
  • Corporate social responsibility.
  • Increasing market shares.

What are the 3 main goals of a business? ›

The hierarchy of Business Goals. When building a business, you should concentrate on a different hierarchy: Survive. Sustain. Profit.

What are the examples of objectives? ›

Examples of objectives include: I will speak at five conferences in the next year. I will read one book about sales strategy every month. I will work with a coach to practise my networking skills by the end of this month.

What are the 5 objectives of management? ›

Here are 11 common objectives for management teams to improve and develop the operations of an organization:
  • Optimize resources. ...
  • Increase efficiency. ...
  • Maximize profits. ...
  • Promote personal development. ...
  • Maintain quality. ...
  • Uphold workplace morale. ...
  • Reduce risk. ...
  • Generate business strategies.
14 Apr 2022

What an objective means? ›

noun. 1. : something toward which effort is directed : an aim, goal, or end of action. : a strategic position to be attained or a purpose to be achieved by a military operation. : a lens or system of lenses that forms an image of an object.

What are the main type of objectives? ›

Brief outlines of the eight main types of objective tests are discussed in this article. The main types are: (1) Matching Test, (2) Multiple Choice Test, (3) True False Tests, (4) Correct/Incorrect Test, (5) Simple Recall Test, (6) Best Answer Test, (7) Completion Test, and (8) Classification Test.

What are the 6 characteristics of good objectives? ›

In my experience, I've found that effective goals are specific, challenging, provide line-of-sight, have a time-frame, are measurable, and are followed up on.

How many objectives are there? ›

To capture the ambitions of your organization, you should have a maximum of 5 objectives with 3-5 key results each. These should all fit on one or two pages. On these pages should be concise, one-sentence objectives. Objectives are significant, action-oriented, and, hopefully, inspiring.

What are the five 5 main parts of a business plan? ›

Main Components of a Business Plan
  • Executive summary. This is your five-minute elevator pitch. ...
  • Business description and structure. This is where you explain why you're in business and what you're selling. ...
  • Market research and strategies. ...
  • Management and personnel. ...
  • Financial documents.

What are the 5 steps of a business plan? ›

5 Steps to Develop a Viable Business Plan
  • Step 1: Define Your Business. ...
  • Step 2: Determine Your Target Audience. ...
  • Step 3: Understand the 5 Forces that impact Your Business. ...
  • Step 4: Create a Competitive Strategy. ...
  • Step 5: Project Your Financial Performance.
5 Jul 2022

What are the 5 C in entrepreneurship? ›

Breakthrough tech entrepreneur Chinedu Echerou is urging budding businesses to observe what he calls the 'Five Cs of Entrepreneurship' - credibility, clarity, conviction, capital and concentration in execution.

Why is social objective important? ›

A social objective is a statement that details a specific desired outcome of a project that is related to the interaction of the individuals, groups, and institutions within a society. Often our social objective is related to improving human wellbeing.

What are the five importance of business studies? ›

6 reasons why you should study business
  • Develop crucial communication skills. ...
  • Marketing 101: Know your audience. ...
  • Accounting and budgeting: Don't fall short. ...
  • Unlock the entrepreneur inside you: Leave your mark on the world. ...
  • Investment & finance: Learn what makes the world go round. ...
  • Project management: A skill for every sector.

Which is the important factor of business? ›

As a reminder, the 5 Key Success Factors are:

People (Personnel, Staff, Learning, Development) Operations (Processes, Work) Marketing (Customer Relations, Sales, Responsiveness) Finances (Assets, Facilities, Equipment)

What are five types of objectives? ›

Learn how to develop SMART+C objectives (Specific, Measurable, Achievable, Relevant, Timed, and Challenging) for your efforts.

How do you list objectives? ›

Therefore the objective should begin with a verb, followed by a short description of what specific task an attendee could expect to perform after participating in the session. Begin each objective with one of the following measurable verbs: Describe, Explain, Identify, Discuss, Compare, Define, Differentiate, List.

What should be the most important objective of a company why? ›

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 business, its growth and expansion over time.

What are the three main objectives of a business? ›

Any given business activity can have at least one of these three goals: The activity can generate cashflow. The activity can generate opportunities. The activity can generate visibility.

What are the most important aspects of objectives? ›

All objectives should be Specific, Measurable, Action-oriented, Realistic and Time-specific. This means that you should clearly define the objective in a way that allows you to determine at a specific later date whether you have met that objective.

What is the objectives of a business? ›

Business objectives are the specific and measurable results companies hope to maintain as their organization grows. Entrepreneurs and business leaders must track performance in every part of their business to make sure they're moving in the right direction.

What are the 5 performance objectives examples? ›

5 Performance Objectives
  • #1 Quality. Customers, employees and stakeholders look for quality in a product and/or service. ...
  • #2 Speed. ...
  • #3 Dependability. ...
  • #4 Flexibility. ...
  • #5 Cost. ...
  • Use SMART technique: Use the SMART technique as it's easy to comprehend and it can help to align objectives to the business goals.
9 Dec 2020

What are the five characteristics of objectives? ›

SMART is an acronym used to identify the characteristics of good objectives. SMART objectives identify who should do what, under what conditions, according to which standards. SMART objectives are specific, measurable, achievable, relevant, and time-bound.

What are the 5 reasons goals are important? ›

5 Reasons Why You Should Set Goals
  • Goals Give You Direction. ...
  • Goal Setting Helps You Identify What's Important to You. ...
  • Setting Goals Helps Us Measure Progress Towards Success. ...
  • Goals Help You Stay Motivated. ...
  • Setting Goals Keeps You Accountable.

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