What are business objectives?

Updated: Feb 21

As entrepreneurs seek to earn profits from their businesses, the business objective of a firm will follow the objective of the owner's – which are profits. Therefore, a firm will aim to maximize their profits.


However, there may be certain entrepreneurs who may aim to profit just to survive or grow the firm. These are social entrepreneur’s who aims to improve the social well-being of society and the environment through a social enterprise.


A private sector business objective may change overtime during different business cycles. During a recession, a firm may only aim to survive as demand for goods and services decline, but as the economy recovers and grow, a business may want to expand, increase market share and maximise its profit. This will change the company’s mission statement, and business target. Sometimes, certain business stakeholders may not favour such changes as they have different objectives.


Most businesses are in the private sector, but in countries with a mixed or planned economy, the number of public corporations (public sector) could be significant. These businesses have different business objectives as their main aim is to serve the public.


The key business objectives of a business are growth, to increase profit, market share, and survive.


RELATED QUESTIONS

  1. Why does firms in the public and private sector have different business objectives?

  2. When does a firm change its business objective and why?

  3. Why does stakeholders have interest in business objectives?


RELATED CONCEPTS

  1. Profit

  2. Growth

  3. Survival

  4. Market Share

  5. Private Sector

  6. Public Sector

  7. Economic Systems


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