Business objectives and stakeholders
Business objectives
- An objective is a goal a business aims for:
- survival (vital when new or in hard times),
- profit (the main aim of most private firms),
- growth, market share, customer service, social objectives.
- A social enterprise aims for three together: economic, social, environmental.
Practice
Which objective is especially important for a brand-new business?
New firms focus on survival first; profit and growth come later.
Stakeholders
- A stakeholder is anyone affected by or interested in a business.
| Stakeholder | Usually wants |
|---|---|
| owners/shareholders | profit and dividends |
| employees | fair pay, secure jobs |
| customers | quality at a fair price |
| government | obeying laws, paying tax |
| local community | jobs, but no pollution |
- Their objectives conflict (owners want profit, employees want higher pay). Managers must balance them.
Practice
A stakeholder is:
Stakeholders include owners, employees, customers, suppliers, government and the community.
Practice
Stakeholder objectives can conflict — for example, owners want profit while employees want higher pay.
Different groups want different things, so managers must balance their objectives.
You've got it
Key idea
- objectives: survival, profit, growth, market share, customer service, social aims
- a stakeholder is anyone affected by the business
- stakeholders' objectives conflict — managers must balance them