Business Objectives and Stakeholders

Business Objectives and Stakeholders

· The objectives of a firm means the goals of the business i.e. what

the business wants to achieve.

· The objectives of business organisations will be shaped by the

various stakeholders in the business. Those with the most influence

will tend to set the objectives.

· It is important for a business to have well defined objectives.

These will help the business to be clear about what it wants to

achieve.

· For example,

Mission Statements

· These are descriptions of the overall aims of the business and its

short term and long term objectives.

· They tend to be aimed at all stakeholders and may be printed in the

Annual Report and Accounts.

· However, they often focus on meeting the needs of the customers,

identifying the specific services to be provided.

Survival

There are 3 times when a business, regardless of their size and status

will consider survival important:

· Early stages of trading- Most firms begin on a small scale,

establish themselves and then grow. The owners of a new firm will

probably be happy to see the firm survive in its first few months of

trading. Also in the early stages decision makers might make mistakes,

therefore the most important business objective might be to survive.

· When trading becomes difficult- During a recession, for example, a

business could face falling demand, bad debts and low confidence.

Individual businesses or industries may face difficulties due to

competition from rivals, falling demand for their products or the

effects of poor decisions. Therefore their main objective during this

time may be to survive.

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...hey don’t

take into account the needs of customers. Increasingly, firms are

giving free after sales service, replacing unwanted goods without

question and training their staff to deal with the public

Government legislation and arguably trade unions have influenced how

businesses treat their employees. A number of laws have been passed to

protect workers. An example of legislation which affects workers is

the disability discrimination act 1996. this is designed to reduce

discrimination by businesses against disable workers. One effect of

legislation is that it protects companies with high standards of

responsibility from those competitors who have little regard for

health and safety at work. Unscrupulous firms will not be able to

lower costs by neglecting health and safety as they will have to keep

within the law.