Business is basically an economic activity, its primary objectives are economic. The economic objectives of a business are to earn sufficient profit to give reasonable reward to the investors of capital and to provide funds for expansion and diversification. The main economic objective of business may be described as under:
(a) Earning Profit: Business activity is undertaken for earning profit. Profit is the basic incentive to business pursuits. It is the most important objective of business. A business needs profit not only for the existence but also for expansion and diversification. The profit is also a measuring rod for business efficiency. Therefore the businessman should charge a reasonable profit which will be beneficial to both business and society.
(b) Production of Goods: Business involves sale or exchange of goods and services for earning profit. So the next objective of business is to produce more goods and sell them to satisfy the needs of consumers. A businessman creates form, place and time utilities and meet the requirements of the society.
(c) Creation of Markets: Business activity can be sustained only if there are enough people to buy the products and services offered by the Enterprise. Without customers a business cannot survive. Customers collectively constitute the market. Thus the objective of business is the creation of market for its products and services to meet the needs of the customers.
(d) Technological Improvements: In business there is cut-throat competition in which businessman try to sell their products by offering quality goods at lower prices. This is possible when the latest technology is used for manufacturing goods. The businessman should introduce new designs using new techniques and tools to keep pace with the changing business world. It should aim at increasing efficiency in terms of "cost per unit of production" or "units produced per day by each employee". Otherwise it cannot survive long in the market.
(a) Earning Profit: Business activity is undertaken for earning profit. Profit is the basic incentive to business pursuits. It is the most important objective of business. A business needs profit not only for the existence but also for expansion and diversification. The profit is also a measuring rod for business efficiency. Therefore the businessman should charge a reasonable profit which will be beneficial to both business and society.
(b) Production of Goods: Business involves sale or exchange of goods and services for earning profit. So the next objective of business is to produce more goods and sell them to satisfy the needs of consumers. A businessman creates form, place and time utilities and meet the requirements of the society.
(c) Creation of Markets: Business activity can be sustained only if there are enough people to buy the products and services offered by the Enterprise. Without customers a business cannot survive. Customers collectively constitute the market. Thus the objective of business is the creation of market for its products and services to meet the needs of the customers.
(d) Technological Improvements: In business there is cut-throat competition in which businessman try to sell their products by offering quality goods at lower prices. This is possible when the latest technology is used for manufacturing goods. The businessman should introduce new designs using new techniques and tools to keep pace with the changing business world. It should aim at increasing efficiency in terms of "cost per unit of production" or "units produced per day by each employee". Otherwise it cannot survive long in the market.
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