1. Profit Earning. It cannot be denied that business is started for earning profit. Profit is the basic incentive to business pursuits. Profits are needed to face various uncertainties like trade cycle, change in demand pattern and fluctuations in money markets. A business needs profits not only for its existence but also for expansion and diversification. The investors want an adequate return on their investments, workers want higher wages and the entrepreneur needs money for reinvesting. All these demands and requirements will be met only when some profits are made.
2. Survival. The objective of every business is to survive in the market. A business faces lot of competition from other business units, encounters fluctuating marketing environment, fears uncertainties of future, etc. The objective of a business will be to face various types of challenges and survive under different situations. It will be possible only when the economic position of the business is sound and it is able to face adverse situations successfully.
3. Growth. A business will stay in the market if it is able to grow with the passage of time. Growth is an important objective for every business. It will be possible only if the business is earning proper profits and is able to finance its growth and expansion. A stagnant business will not be able to survive for long and it is essential that growth plans should be prepared and implemented for the better future of the business.
Other Economic Objectives of Business
1. Production of Quality Goods. The profit can be earned only when some exchange of goods and services takes place. So the next objective is to produce more goods and sell them to the consumers. The producers estimate the demand for goods and produce accordingly. The tastes, preferences and paying capacity of consumers must be taken into account. A businessman creates form, place and time utilities and meets the requirements of the society. So, a tangible form of wealth is produced in the form of goods.
2. Creating Customers. The aim of the business is to sell products. Marketing consists of those efforts which effect transfers in ownership of goods and care for their physical distribution. Marketing covers all those activities which relate to the creation of time, place and possession utility. The businessman searches for new consumers for increasing his sales. An effort is made to retain old consumers by supplying them better quality goods at reasonable prices. The new markets are also exploited to keep a steady demand for goods. An enterprise cannot exist without finding out new markets for its products.
3. Technological Improvements. A businessman should always strive to use latest methods of production. In the world of competition, everybody tries to sell his products by offering good quality products at lower prices. This is possible when latest technology is used for producing goods. There should always be an endeavour to increase production and reduce costs. The businessman should try new methods. so that he may keep pace with the changing business world.
4. Innovation. Innovation refers to new methods of production and adoption of latest technologies. When newer and better methods of handling various functions are used then there will be better results. The companies using innovations first will benefit the most. In a competitive business environment innovation helps in taking advantage of latest development. Innovations help in improving the profitability of the business.
5. Optimum Utilization of Resources. It refers to the best use of men, money, materials, machinery etc. The resources are scarce and their proper utilisation will help in improving the economic position of the business.
The objectives of optimum use of resources will be achieved, if following factors
are taken into account:
(i) Proper training be given to employees so that machines and equipment are used in a best possible way.
(ii) Wastage of materials should be curtailed.
(iii) Find out ways and means of using waste products.
(iv) The spending of money should be in consonance with the benefits derived from
it.
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