Chapter 5 : Business Objectives and Stakeholders Objectives-Questions and Answers Graded A+

Chapter 5 : Business Objectives and Stakeholders Objectives-Questions and Answers Graded A+ What are business objectives ? - ANSWER-Business Objectives are the aims or targets that a business works towards. Benefits of setting objectives : - ANSWER-- give workers and managers a clear target to work towards and this helps motivate people - decision will be focused - Clear and measurable objectives help unite the whole business - Compare how business has performed with their objectives. Common objectives for businesses - ANSWER-- business survival - profit - return to shareholders - growth of the business - market share - service to the community What is profit ? - ANSWER-Profit is the total income of the business (sales revenue) less total costs. Why are profit needed ? - ANSWER-- pay a return to shareholders - provide finance for further investment How can the return to shareholders be increased ? - ANSWER-- increased profit and the share of profit paid to shareholders as dividends - increasing share prices Why might the owners and the managers of the business aim for growth ? - ANSWER-- to make jobs more secure if the business is larger - to increase the salaries and the status of the managers - to open up new possibilities and help to spread the risks of the business - to obtain a higher market share - to obtain cost advantages What is market share ? - ANSWER-Market share is the proportion of total market sales achieved by one business What is a social enterprise ? - ANSWER-Social enterprise has social objectives as well as an aim to make a profit to reinvest back into the business