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Explain the objective of business?
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Explain the objective of business?
The term 'business' has been derived from the word 'busy',Thus, business means being busy. However, in a specific sense, business refers to an occupation in which people regularly engage in activities related to purchase, production or sale of goods and services with a view to earning profits. The activity may consist of production or purchase of goods for sale, or exchange of goods or supply of services to satisfy the needs of other people.
Objectives of Business:
The objective of business means the purpose for which a business is established and carried on. Proper selection of objectives is essential for the success of a business.
The objective of business means the purpose for which a business is established and carried on. Proper selection of objectives is essential for the success of a business.
The businessmen always have multiple objectives. All objective may be classified into two broad categories. These are (1) Economic objectives and (2) Social Objectives
1. Economic Objectives
Business is an economic activity and therefore, its purpose is to show economic results. The economic objectives of business are follows:
(i)Earning profit: Profit means excess of income over the expenditure. The foremost and prime objective of every businessman is to earn profit. A business cannot service without earning profit. Not only for survival but it is also required for growth and expansion of business.
(ii)Market standing/creation of customer: Business can survive for a longer period only if is able to capture a big share in the market & has market standing. It is possible only when business provides goods and services to satisfy the needs & wants of customers. Therefore, creation and satisfaction of customers (market) is an important objective of business.
(iii)Innovations: Innovation means making new products or adding new features of old products for making it more useful, improving methods of production & distribution exploring new markets, etc. In these days of competition, a business can be successful only when it creates new designs, better machines, improved techniques, new varieties etc.
(iv)Optimum utilization of resources: It refers to the best use of men, material, money and machinery employed in business. The resources of business are scarce so these must be utilized in the best possible manner so that the business can get maximum benefit from their resources.
(v)Improving productivity: It is used as a measure of efficiency. Every business enterprise must aim at greater productivity – to ensure continuous survival and growth. This objective can be achieved by reducing wastages and making efficient use of machines and equipments, human resources, money etc.
2.Social Objectives
Business is an integral part of society. It makes use of resources of society. It earns profit by selling its products or services to members of society. So it becomes obligatory on the part of the businessman to do something for the society. The important social objectives of business are as follows:
(i)Quality goods and services at Fair Price: The first social objective of business is to provide better quality product at reasonable rice and in proper quantity on continuous basis to consumers examples.
Example: Consumers look for ISI mark on electrical goods, FPO mark on food products. Hallmark on Jewellery.
(i) Avoidance of Anti-Social and Unfair trade practices: Anti-Social practices include hoarding, black marketing and adulteration. Making false claims in advertisements to mislead and exploit people is an example of unfair trade practice. Business should not indulge in such practices.
(ii) Generation of Employment: Now days, employment is the biggest problem of society. Business should provide employment to more and more people living in the country. Handicapped and disabled people should be given extra care.
(iii) Employee Welfare: Employees are a valuable asset and they make significant contributions towards the success of business. Another social objective of business, therefore, is to ensure welfare of employees by providing good working conditions, fair wages and facilities such as housing, medical and entertainment etc. such welfare facilities help to improve physical and mental health of employees.
(iv) Community service: Business should contribute something to the society where it is established and operated Library, dispensary, educational institutions etc. are certain contributions which a business can make and help in the development of community.
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Explain the objective of business?
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Explain the objective of business? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about Explain the objective of business? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain the objective of business?.
Explain the objective of business? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about Explain the objective of business? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain the objective of business?.
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