For Grade 8B
Discuss whether profit is always the only main objective for any business.
(Please check: Period October 15th to 20th)
November 4th to November 11th, 2013
Write here your answer in 500 Words.
Write here your answer in 500 Words.
Business organisation can be divided into 2 and they are profit organisation and non-profit organisations. For profit organisations their main objective is to maximize profit so they will do anything so that their profit will increase and their cost decrease. Meanwhile non-profit organisations are organisations that gives goods or services with the objective of helping the people. They don’t think about profit, and usually the money that they receive comes from the people. Somke examples of non-profit organisations are churches, mosques, sports club. These organisations get their revenue from their members and they spend their money for their members. Some examples of profit organisations are Indofood, Nike, Apple, Blackberry, these organisations shape big and small companies where they sell their goods and services above the cost of sales.
ReplyDeleteSo profit organisations states that their main objective is to make profit, to satisfy the stakeholders especially the board of directors, shareholders( If the company goes public). Sometimes management fakes the financial statement to get the desired amount of profit. This is done by the management because they are charged by the directors and companies to make as much profit as possible however sometimes their don’t achieve their target, this influences the management to cheat by faking their profit. Some profit organisations in their objective to decrease cost are gonna pay their workers with low wages, this effects their profit because the lesser the expense the more profit, but this condition makes workers not happy to work in that organisation and they might do their jobs without any responsibility. Usually in these kinds of profit organisations the employees like to leave and the organisation likes to hire more workers.
In non-profit organisations, sometimes they also sell goods and services this is just to increase their revenue so that they can use their money together. The revenue that they earn comes from people that becomes a member of the organisation like for example in sports club they get their money from member’s fee and monthly fees. They don’t acknowledge profit, if tyhey earn more money than their expense they call it surplus and if they get lesser income than expense they are gonna call it deficit. They are also gonna make a trading account if the non-profit organisation sells goods and services, their profit is gonna be used to increase their budget.
Now the government is starting to pay attention on the actions of the profit organisations. The government pays attention on the profit organisations so that the profit organisation won’t justify everything their doing to maximize profit, the government has made a program called CSR it stands for Corporate Social Responsibility this means that profit organisations must do something to the environment and to people around themsome examples are giving scholarship, giving free medicine and health care.
So in conclusion some companies’ objectives is not to maximize profit because that company is a non-profit organisation, there are also some companies that have the objective to serve people well and produce good quality products they thimk if they do tese things their sales and profit will increase by itself. Treating the employees well also helps a company to grow that at the end will make the employee loyal. If the employees are treated nicely they will be happy to work and they will work as hard as they can to help the company. But most companies have the objective of maximizing profit.
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ReplyDeleteProfit is a very important and a must for most of the firms to survive and keep expanding in size. Survive may include to cover all expenses and other cost of production. Expanding in size is also important for most of the firms to gain more or increase sales, income, profit, market share, famous, and many other beneficial factors.
ReplyDeleteProfit is the main income or money source for a firm. Through profit, a business can cover or pay all of the cost of production, tax and other expenses. That thing is called for business survival. Other than for business survival, it is also very important for a firm to keep expanding in size by invest more money to add the business capital for having bigger scale of production, sales, income and earn bigger amount of profit, or make the business income cycle turns more and more faster. That means, profit can make bigger profit as long it is managed well by the Business Financial Manager or a very beneficial thing for a firm. But if no profit, where or from what source can the firm earn to cover all of their expenses and cost of production? Or even bigger impossible matter to expand in business size? Loan from bank? Attract more business investors or shareholders? It can’t be because investors won’t be interested in a business that can’t well managed or well organized because it is a very not beneficial investment. Also if loan from bank. How can the business pay back the loan with the interest they took if not from profit or income? Also with the bank that won’t be easy to trust the firm without detailed explanation about the process for the business to pay back the loan and interest they take…, so it will be hard or a bit impossible for most of the firm to survive their business and keep expanding in size if not from profit or income as the money source. So most of any business will have the top priority or the most main objective to obtain profit as much as possible.
But it could be possible for a foundation or business firm to keep running the business without profit as money source. Especially foundation, they have main objective for public or world’s charity. They can survive without making profit. They run or work as charity or voluntary work that means the foundation members who work for the organzation have goal to help public. They can get money form other source. For example by looking for public volunteers donation over the world, ex: Tzu Chi Foundation from China. They looking for donation over Asia. They have objective to heal poor society that are affected by diseases or sick and also open free Buddhist School for poor kids or only charges a very little of fee. Beside charity also there are some organization that run for educating poor people and many other else. There are also some business firm that have objective to have a very large in sales but not charging for high product cost, ex: Samsung. They sell a very cheap handphone or standard smartphone to certain areas that contain many poor people. They only targeted to have great scale of sales but not searching for great income of profit. They can still keep expanding in business size by charging much cost to the exclusive and expensive product that only targeted for rich people or customers.
So profit mostly will be set in a firm that have other objective to keep expanding in business size, income and increase in market shard value or lead the market. But profit won’t be set in an organization that run for open source, voluntary or charity.
That is all ideas that popped out from my brain, thanks. By Constantius Neil - Grade 8B
Usually, a business need profit and make profit as their objective. Objective is something which you try to do. Profit is money gained from a sale which is more than the money spent. But, profit is not always become the main objectives of a company.
ReplyDeleteMost of the company in this world are trying to make as much profit as they can, so the company can be survive and if they get loss, they will be bankrupt. But the other reasons are, if their profit is high, they also can increase the price of the company’s shares and it will make the investors want to invest in the company, the company also can help the government by paying the high amount of taxes so it will make more development for the country. It also make the company can buy the newest machines or develop their current machines. It also can make the workers happy because their bonus will be high and it can increase their loyalty to the company. The company also can be more trusted such as the bank will allow the company to loan because they will sure the company can pay their loan, the supplier also can trust the company because they are sure the company also can pay what they have buy because they think the company has much of money. Customer also can trust the company because it can mean that the company can provide the things they want to buy. The company also can increase the business’ network, they also can increase their product especially developing their current product. They also can be the market leadership to choose the price of the products, the example is Aqua as price market leadership with very high profit and very newest technology.
But, not all company make profit as their main objective. Sometimes they also make something else as their main objectives. Because every owner can make their decision for the company. There are some main objective that a company can make such as profit maximization, loss minimization, charity, sales revenue maximization, but as the time go, they can change their main objective. It also can depend on what company it is and what situation happen to the company. The examples are Samsung company, their main objective is to become the leader of the market or sales revenue maximization, but their competitor Apple make profit as their main profit. The example that a company can change their main objective over time is Nokia that have their profit as their main objective before, now they change to loss minimization because they are getting loss now because not really much people want to buy Nokia. BBC also a company that really make charity as their main objective as their main objective.
As the conclusion, we can’t say that every company’s main objective is to maximize their profit some of the companies don’t make profit as their main objective, but most of the companies make profit as their main objective.
Richard Sanders - 8B
But there are also some businesses that objectives is not to make as much profit as possible. There are business that have an objective to help public or the nature . So the workers are voluntary and they get they’re money from Profit is very important for business and is the key of survival and growth of the business in the market. Profit is very important to business because it is needed for business growth. When the business grows , it allows the business to keep up with other, better business so it can survive and business is able to get other beneficial factor.
ReplyDeleteProfit is used to provide living for the owner. Without profit and just revenue , the owner of the business will not get anything. Profit makes the owner want to keep the business because owner gets profit. Profits can also be used to make bigger profit. Profit can be used to expand business and by expanding the business, business can produce more goods and services leading to a larger revenue and a larger profit gain by business. Without profit , business cannot grow and expand and business also cannot gain more money by borrowing loan from the bank and attracting shareholders. Banks would not want to lend money to business that are not able to get profits and shareholders would not like to join a and grow without the profit as a money source to grow and survive . So to get as much profit as possible is the most important objectives for some businesses . business organization if the business don’t produce large profits. So it will be hard for a business to survive
donations from other organizations. Like the greenpeace. There are also businesses that have objectives to have large revenue but not large income such as Samsung. Samsung objective is to sell as many goods as possible. They sell a wide variety of phone from the cheapest to the most expensive. They sell their phones to any people, rich or poor. They’re target is to sell as many goods as possible to the public. They can expand they’re company from the profit they make.
So , to make as much profit as possible is the objective of most business. But there are also business that have objectives other than to make as much profit as possible , like to help the public or nature and to have a large scale sales.
Well , for some business , profit may become the mainly objectives. But for some others business ,profit may not become the mainly objective. There are some other examples such as increase in the market size , increase in share ,etc . Each type of business organization will have a different objectives. There are five type of business organization , which are sole trader , partnership , private limited company , public limited company , and joint venture .some of them will have profit as theyre main objective but there are also some business that are not focusing on profit .
ReplyDeleteFor some new and small business , profit may become the mainly objectives. They don’t have a thinking yet for another objectives to become the main such as increasing in their market size , increasing in shares , etc . This is happen because for some new and small business , survival will be the very important thing. so this profit may become their mainly objectives so that the business can still be run and provide a living for the owner. This profit can be used for them to continue their business and to provide a living for the owner it self. Well it will not only happening in a small business. Some big business during the economic recession may change their mainly objectives in to a profit. This profit may help them in recurring their business form a fall that happen because of the recession .Not all big businesses will not have profit as their mainly objective. There are also some other big business that have a growth in profit as their main objectives. Actually , profit will be the most important thing for a businesses. But , for some big businesses, because they already have too much profit , They want to change their main objective so that the business will not only have a high profit , but also another objectives such a good quality of product , well known, increase in output/sales , etc. Like example this one. A sole trader will have a a profit , to support a living for the owner ,and growth as their objectives. In this case their main objective will be to support a living for the owner ,but to make it happening it needs a profit to support it. For an incorporated business, their objective will be profit growth and increase in market share. For some incorporated business , their objective may become to increase the market share but for some of them ,profit may become their main objective.
Not all business will have a profit as their main objectives . For some big businesses , such as public and private limited company , to increase their market share may become their main objectives. They already have a big profit with that business and want to change their mainly objective so that they will not only have a profit as their objective but also with their size and market share. There are some example of others business objectives such as increasing their size , increasing their market share , increasing in output/ sales, etc .All of that need some money to make it happening. Well that money will come from a profit. That’s why for some big businesses , They may change their objective because they already get a high profit. No need to be worry again of the profit , because their sure that their product provide a good quality that can attract consumer to buy it and making a lot of profit.
So the conclusion is that not all businesses will have a profit as their only main objectives. Usually the one that have a profit as their main objectives will be a small and new businesses such as sole trader and partnership. For some big businesses , usually they are not worry again with that profit , They are usually focusing on their market share , market size , etc.
There are 3 key objectives of a business . The first one is to be profitability . The second one is to grow in size . The third one is to increase market share . The main objectives of a business is to earn profit. WHY? Because , without profit , a business will not grow in size and increase their market share . Profitability means that the ability to continually generate revenues from the sale of it’s goods and services that exceeds the cost , profit motivates entrepreneur ( a person who organizes , operate and take the risks for a new business venture ) to set up and run business organisation , some business owners aim for a profit maximisation (↑PROFIT , ↓COST). Growth of size means that a business owners and managers may want to increase the size of their business, to increase sales , market share and profits ,, growth will be easier if demand for goods or services is rising , if not that business can only expand by attraching customer for its’s competitor . Increase in market share means that it can measure the proportion of total sales revenue or turnover that’s attributable to the firms , new business entrants my initially lower their price and spend more on advertisement to gain market share , Increasing market share will achieve higher sale and in the future increase the price to gain more profit . Now , why some firm may remain small ? There are numbers of reason why firm would like to stay small, in which are : - the size of the market , - access to capital is limited , - new technology has reduced the scale of production needed , - some business owners may simply chose to stay small . Profit is very important for a business to increased in size , increasing market share , and many more . How to calculate profit ? Profit is calculated by total sales of goods or services – total cost of goods and services – total operating expenses . That is how we calculated profit . But , how if some business’s total sales of goods and services < total cost of goods and services ? THE BUSINESS WILL GET LOSS . So , in conclusion , there are some business who want to increase in size and keep generating profit . Profit is always the main objectives of a business . But , there’s also some business that aimed not to generate profit . SO , every business has a different aim . Some business want to keep generating profit , but there is also business that aimed not to be specialized in generating profit . Usually , a business who always want to keep generating profit are such as Public Limited Company and Private Limited Company . Because , not every partners / sole trader who aimed to earn profit. They may get loss into their business . Profit = Total sales of goods and services – total cost of goods and services – total operating expenses .
ReplyDeleteThat’s all from me ,
LEONARDO STEVEN Grade 8B
Thank You
All business organizations in the world, whether it’s big or small, they all makes profit. Profit is the amount of money a company makes from their total sales deducted by the total cost of productions. People in this world works to fulfill their needs and wants. There’s no doubt of having a job, because there’s no way people could fulfill their family’s needs if they don’t work. There are many needs and wants of human, they are unlimited, such as : school fees, course fees, electricity, taxes, food supplies and much more. These are only few of the things we've spend for, there are more than these. This is the reasons why we need to make money. People work for money, and people built business to make profit. A business is built by an individual so that that company could makes lots of money and can help the individual’s financial. A business needs profit as a modal, and to en-cover all the money that the owner have spent to built the business and the cost of productions. It’s not only about making profits for the business but as the incomes of the owners and for paying the man hours. A business objectives is usually making big profits, increase in size, enlarge in market share and become famous. Why does a business leads to these? The main reason is so that they get lots of profit and can increase their modal and income. They can expand their business and become famous. By then, they can receive more and more profits. And the other main reason is so that they don’t fall to a trap called the “Dept Trap”, it is a situation where the company needs to borrow money, so the company borrows money from bank A. But the bank insist that the company must pay by a certain time + the interest. And when it is time for payment, the company still have no money, so they borrow money from bank B to repay Bank A. But then, Bank B also gives limitation of time, and the company also must pay for the interest. But the company still has no money, so they kept on borrowing from one bank to another. It may not only be from banks, but also from individuals. Not all business’s objectives is to make profit. What I was explaining about before is the objectives of a private sector company. But, in a public sector company, their main objectives is to give services to people because of their capability to pay for the goods and services. Private sector companies are ruled by non-government people. They are individuals / groups that only care about themselves and about their company, not others. While public sector company is built to help people. It can also be built for a charity to the poor and needs. So, the conclusion is that, all the companies are built to make profits. But it depends on how they use the profits. Before, I said that not all companies are built to make profit. But if we analyze more, we can realized that all companies in this world is built to make profit, whether it’s for charity or for personal income. It just depends on each individuals that use that profit.
ReplyDeleteRegina T. 8B
Profit is usually the most important thing for the business to run we can calculate the amount of profit we make by deducting our revenue or income with our cost of sales by doing this we can achieve or get our profit in some business their objective is to gain profit such business used profit maximization profit is important to a business because it keep the business regulating so it can pay debts,increase in size and increase market share all business want to increase in size and increase their market share so they could be a big strong business but actually there are other business that have other objective such as the business that objectives are such as
ReplyDeleteSome business are profit maximization such as the apple company their business aim to get the biggest profit by making their apple products very expensive but profit is not always the objective of a business because of this other factors this business earns their money because they increase the price of the product high like before i tell about the apple company they make their product cost so high so they could get high amount of profit thats why we called the profit maximization business.
Loss minimization company, the loss minimization company objectives is not to make high profit but to lower their cost of production by doing these they can decrease their expenses they cam decrease their cost by buying products in high amount or Purchase or cheaper material this business can earn money because by cutting their cost they can get more money from the selling of the products.
Second is the welfare maximitation the charity this is such as the wwf foundation their objective is not to gain money but to increase the welfare of it member such example are the cooperatives this
Third is the not for profit organization which are organization that doesn't seek profit but they provide help and other thing which is like a charity examples are such as the wwf this organization are not allowed to make profit this business can get income from peoples donation and money from the government.
The fourth is the sales revenue maximization the sale revenue maximization aim is to increase their sales in the market this buisness don't seek for high profit but they seek for the biggest sales in the market because it can make them leads in the markets and so this business can get money because by making more sakes they can get more income.
So in my conclusion even if profit is a very important thing for a business because it keeps the business regulating and it can make the business expand to a larger business and to pay debt and to increase the owner welfare there are also other business with other objective such as the loss maximization business,welfare maximization business,not for profit organization and the sales revenue maximization business which don't make profit as their priority objectives in their buisness.
Profit is a financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business. Well main objective is what the business wants to achieve. Of course many of the business main objectives are to gain profit. But not all business main objectives are to gain profit, so here is some of the advantages and disadvantages.
ReplyDeleteMany business main objectives there is three, first profitability, to calculated profit is total revenue minus total cost. Profitability is the ability to continually generate revenues from the sale of its goods and services that exceeds the cost. Profit motivates entrepreneur to set up and run business organization, why because the entrepreneur will think if they already get profit maybe in the future or in the present they can get more profit again, so profit can motivate the entrepreneur to run the business again, Some business owners aim for profit maximization (↑price ↓cost). The most important and the most often main objectives is the profitability. Not only profitability there are also to growth in size, Business owners and managers may want to increase the size of their business, to increase sales, market share and profits. If they increase the growth of the business means they can increase the sales and if they increase the sales means they will get more profit too, so it’s the same they increase the size to get more profit, Growth will be easier if demand for goods or services is rising, if not that business can only expand by attracting customer for its competitor. Third is to increasing the market share, Measure the proportion of total sales revenue or turnover that’s attributable to the firms, new business entrants my initially lower their price and spend more on advertisement to gain market share, increasing market share will achieve higher sale and in the future increase the price to gain more profit. If they increase the market share, the amount profit they gain or got is based on how big or small is their share is, if their share is small means they also get the profit on the small amount and if their shares is big means they got the big amount of profit too, and they increase they shares to increase profit, so it’s the same.
But not always that the main objective of a business is always profitability, example for the new business survival is the most important objectives. So not always that profitability, growth in size and increase in market share are always the main objectives. Or large and established business during economic recession, technology may also change the objective of the business. If the technology is already more modern so it can increase the sales of the production and it will also can increase the profit.
So in the conclusion, the most usual main objective is profitability because profitability also can motivate the entrepreneur to run the business well, but not always that the main objective of a business is a profitability but survival also, expel new business main objective of course survival because they need to survive first before they can get much profit.
ReplyDeleteFirst, different business will have different objectives. But most of them focus mainly on making profit; some will focus on non-profit factors. There are basically 6 types of business which are: sole trader, partnership, private limited company, public limited company, joint venture and franchise. These businesses have all different objectives. We will discuss each of these business’ objectives
First, sole trader. Sole trader is a business organization that is owned and controlled by one person. The owner is actually the business, since he or she is the only one who will control the business. Sole trader’s main aim is to make profit. Usually they will need the profit for funding the owner’s daily needs and supply or for the family to live. This kind of business is the most common one over the world.
Second, partnership. Partnership is A legal agreement between two or more people, usually up to 20, to own, finance and run a business jointly and share any profits. Partnership has more than one objective, which are: 1. provide a living for the owner by making profit, just like sole trader, 2. To run a professional services 3. To increased market share.
Third, private limited company. It has one or more shareholders but will only sell shares to people known to the existing shareholders. Its main aim is to make Profit, and to increased market share.
Fourth, public limited company. It has at least two shareholders and can sell shares to any individual or organization on the stock market through stock exchange or bourse. Public limited company’s objective is almost the same as as private limited company, since they both are incorporated business. Sole trader’s objective is also to make profit and to increase the market share in its business.
Fifth, joint venture. A contractual agreement between two or more organization to share expertise, investment, management, costs, profits and risks of running a new business project. Its objectives are mainly to create a new venture based on an agreement between two existing companies and also to make a profit in a new area of operations.
Sixth, franchise. Franchise is an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, for example acting as an agent for a company's products. Franchise’s objectives are divided into two, for the franchisor and for the franchisee.
For the franchisor: to expand business over a wider area and to increase profits.
For the franchisee: to set up a profitable enterprise using the support of the franchising organisation
Besides these 6 business organization, there are also different objectives for small firms and large firms. Usually, small firms or newly opened business will focus more on making profit, since they will have to survive so the business will not be bankrupt. But for large and exprienced firms, they will not be worried of getting bankrupt since they are already big and famous, instead of worrying their profit, they will focus more on other factors such as bigger market share, and increasing growth of the firm.
Other than the list above, there are also other organization that are not looking for profit, instead they are more focused on services and help. Such organization can be exampled by charities such as Comic Relief in the UK
So in my conclusion, different types of business will have different objectives. Some will include profit, some will not. some will need profit for their daily lives, some will not worry about profit anymore since they are already big. Some will not focus on profit-making, instead they are helping the society.
Celine Kusnadi 8B
Profit is one of the main objectives of most business, but business is divided into 2, which are profit-intensive and non-profit intensive. Profit intensive organization is the firms that produce and manufacture goods and service to be sold to the customers to earn profits to increase its size and expand their market share, examples are KFC, and Zara. But there are also firms doesn’t focus on profit and more on other objectives, some of the objectives are the society welfare, environment, customers’ satisfaction and many more. Usually a non-profit intensive organization is a governments’ corporation and temples, which the capital is from the member itself.
ReplyDeleteProfit is really important for any business for survival, especially for the new and small businesses. Companies that have more loss than revenue will go bankrupt and trapped in either limited or unlimited debt. That’s one of the reason why they need to get high profits, but there’s another reason why firms want to get high profit or called as profit maximization. One of them is to increase their company’s market share which will attract more and more investors to invest on their company which can make them more famous and increase profit too. And for examples big companies, they usually treat and give better service to their employees than the lil profit-companies. They give free health care, transportation(some companies like indomobil finance in Indonesia), fringe benefits like going to a particular place with family free! And which will attract more employees to apply for work there because of the good service, and to provide those services, we need money, which come from the profit the company earn.
Every business need profit to keep the business open and survive in the world of trading. They need them to expand their size and market share. That’s why business want to earn lot of profit, but the business that doesn’t aim for lot of profit, usually like charity, they invest their capital from their own members and didn’t get a lot of profit from their charity work, because they didn’t aim for that, they aim for the social welfare. For a sole trader, the business might want to earn profit only for the living of the owner, and for incorporated business, they want to grow in size and in market share too and profit maximization may occur in order to make those goals to be achive. And some business can decide to not increase their market share, or size. Because of the owner’s decision. The owner may feel satisfied with all his/her profit and stop there and don’t do anything to increase their size, but its not only because of the owner’s decision, the owner might want to increase their size but the business doesn’t have enough capital, and its hard to borrow from the bank and they need some new technologies in order the business to increase, but they don’t have money.
So, my conclusion is that profit, is important to all kind of business in order for the business to survive, its just different from the business is profit-intensive or non-profit company and the objectives of each business.
A business organization can be divided into 2. There are profit organization and non profit organization. For a profit organization they will do anything to get profit as much as they can. They don’t care about the other things the main object is to gain profit even if they need to trick people if they can get high profit they will do it. The non profit organization is an organization that work not to gain profit. They work for charity and to help other people or for homeless people. They don’t care about how much money that will they get from doing that job. Business that are around us like Burger king, KFC, sushi tei, pancious, xo suki , and etc are examples of the profit organization. WWF, go green, and etc are the example of the non profit organization. A profit organization need profit to survive because they need to compete with another business. They need this profit because they can do many things with this money and make their company get more profit. They can increase their profit by increasing their business size. They can increase them by getting more workers to increase their productivity and so the business will earn more money even though they need to pay the workers more money as long as they get more profit they will do it. Another thing is they can reduce their workers and then find a people that have a greater skill. If they replace all the workers to specialized people. Even though the worker become less and the firm will need to pay more than the ther the productivity will increase because a specialized people is already used to do the work so they can produce more than the workers. The firm can also reduce some of the worker’s in producing and buy machine so their productivity will increase because machine can do work faster than human. The business will only need to find the driver and he do not need to worry about the production. When a business doesn’t have any money to expand their size or to buy the machine they can borrow from the other business or from the bank. But banks will not lend money for the business that is small because the bank do not want to take the risk. If the company did not survive the bank will lose a big amount of money but for the big company especially the famous company the bank will lend the some money because their business is already big but the banks will give them some interest that they need to pay. Well for the company it will be fine because from the money that they borrow from the bank they can grow their size even bigger and earn more profit. But a business can not be to big because if the business is to big and the interest of people for that business reduced they will lost a very big amount of money . the conclution is a business have different aims, some of them is only to make profit as much as they can and some of them only wanted to help other people or animals .
ReplyDeleteVincent CIA
8B
Profit is the amount of money a business makes after accounting for all the expenses. A large percentage of the profit of the business usually goes to the owner or shared equally between partners or shareholders (depending on the amount of shares they hold). It is usually the objective of a business. Now a business objective is a specific result a person or system aims to achieve within a time frame and with available resources. In general objectives are more specific and easier to measure than goals. Objectives are basic tools that underlie all planning and strategic activities. They serve as the basis for creating policy and evaluating performance.
ReplyDeleteThere are 3 main business objectives. The first would be to gain profit which is usually the business’s main objective. In this case the business such as nike, they aim to increase in profit. On the other hand other businesses aim more to grow in size. Usually if your business is larger you’ll be better known, you’ll have greater human resources, and also higher compensation packages. The third main objective would be to increase market share. In this way you’ll get more people to buy your shares and to invest in your company so that you’ll gain more capital and hence you can increase your business using that capital or you can increase your costs.
Business objectives differ through many different ways. It could be through different types of businesses, for example; a sole trader’s business objectives would be to provide a living for the owner, also to increase profit and the size of the business, whilst a public corporation’s objectives would be more to improving their services that they contribute to the society. Also there are different types of business objectives, some of them are :
1. Profit maximization
Profit maximization is the short run or long run process by which a fim determines the price and output level that returns the greatest profit. There are many examples of firms whose main objectives are to maximize their profit (Samsung, Zara, McDonalds, Microsoft, Coca-Cola, shell, etc.). However maximizing profit isn’t every business’s objectives.
2. Loss minimization
A business will not always earn profit occasionally, a firm will incur a loss, that is, total cost exceeds total revenue and most business’s objectives is to minimize that loss so that they don’t loose as much money. There are many ways to minimize the company’s loss such as putting the products to a low price, maintaining the market share, controlling their cost (so that they don’t spend as much), etc.
3. Welfare maximization
Some companies choose to rather maximize their welfare such as WCS, that is to protect wildlife so that the animals wont be extinct and to preserve the natural environments. Also others aim for charity, so that their funds come from the donation of others and also financial help from their government.
4. Sales revenue maximization
Sales revenue maximization means to increase their sales, it doesn’t necessarily mean that their objective is to increase their profit/income but to be at the top of the market and in that way it’ll be easier for them to gain more profit or income.
To conclude it, there are many different types of business objectives and usually the most common one is profitability. However it isn’t the main objective for any business since there are other objectives for different types of business such as welfare maximization objective businesses, public businesses (who aim more to services than to profit), and many more.
Charlene 8B
There are two main types of companies public and private companies. Public companies are usually formed by the government and funded by the government. While, private companies are made by the public people and are funded by themselves. That is the main difference between private and public companies. Another difference is that public and private has different types of objectives.
ReplyDeleteFor most private companies the objective is profit. As most private companies, are made to make profit for the owner of the company. The examples are most partnership companies, these people are joining together to find better ways to have higher profit.
But, some private companies don’t have profit maximization as its objective. Some companies have instead loss minimization which is in certain cases better than profit maximization. Usually companies minimize loss by developing newer, better and cheaper machinery.
Public companies are very different from private companies. Their objective is to help the country, instead of profit or loss minimization. Like the power companies their objective is to provide the cheapest possible power. The same could be said for the water company.
In conclusion, some companies has profit maximization as their objectives but there are other companies that don’t most notably is the public companies
ReplyDeleteA business produces goods in order to satisfy other’s demands and wants, generally, in exchange for profit (Sales). But business’ objective are only to gain/find profit, they could just build a business for other reasons, like;
Charity, a business’ objective could be for charity, for the benefit for others rather than the business itself.
Some business organisations are also not for the benefit of the company but rather the society, taking care of the environment, the condition of people (poor living condition), for example, grrenpeace.
Public corporation, a public corporation are government owned, these business organization gives out subsidies to lessen the price of goods for people who does not have enough money to buy, and fulfill their needs. They are build for the benefit of the citizens of the country rather than profit.
So in order to conclude on what have been said above, a business organisation’s objective are not only to gain profit, but also for other reasons, for example, the benefits of others or society.
Grace – 8B