Business Objectives

What are the benefits of having clear and measurable business objectives?

• Provide finance for further investment and pay a return to owners

• Increase market share and obtain cost advantages

• Increase returns to shareholders and discourage selling shares

• Motivate people and focus decisions on achieving targets

When is the business objective of survival important?

• When the economy is moving into recession

• To open up new possibilities and spread risks

• To increase salaries and status of managers

• To obtain a higher market share from growth in sales

What is the purpose of the business objective of growth?

• To make jobs more secure and increase salaries of managers

• To provide finance for further investment and pay a return to owners

• To obtain cost advantages and increase market share

• To discourage shareholders from selling their shares

What is the definition of profit in a business?

• Influence over suppliers

• Increased market share

• Value of sales or output

• Total income less total costs

Why are profits needed in a business?

• To obtain a higher market share from growth in sales

• To make jobs more secure and increase salaries of managers

• To pay a return to owners and provide finance for further investment

• To open up new possibilities and spread risks

What does increased market share give a business?

• Good publicity and increased influence over suppliers

• Provide finance for further investment and pay a return to owners

• Motivate people and focus decisions on achieving targets

• Increased influence over customers and becoming relatively larger than others

How does the business objective of survival relate to new competitors in the market?

• It discourages shareholders from selling their shares

• It opens up new possibilities and helps spread risks

• It helps managers keep their jobs

• It is important when a business has recently been set up

How does the business objective of growth help a business?

• To obtain a higher market share from growth in sales

• To obtain cost advantages from business expansion

• To discourage shareholders from selling their shares

• To compare how the business performs to their objectives

What is the purpose of the business objective of increase returns to shareholders?

• To increase the salaries and status of managers as the business expands

• To open up new possibilities and help spread the risks of the business

• To discourage shareholders from selling their shares

• To provide finance for further investment in the business