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  1. business-and-its-environment

    enterprise
    6 主题
  2. business-structure
    6 主题
  3. size-of-business
    3 主题
  4. business-objectives
    3 主题
  5. stakeholders-in-a-business
    2 主题
  6. external-influences-on-business
    12 主题
  7. business-strategy
    10 主题
  8. human-resource-management
    human-resource-management-hrm
    8 主题
  9. motivation
    4 主题
  10. management
    2 主题
  11. organisational-structure
    5 主题
  12. business-communication
    5 主题
  13. leadership
    2 主题
  14. human-resource-strategy
    3 主题
  15. marketing
    the-nature-of-marketing
    7 主题
  16. market-research
    3 主题
  17. the-marketing-mix
    6 主题
  18. marketing-analysis
    5 主题
  19. marketing-strategy
    3 主题
  20. operations-management
    the-nature-of-operations
    3 主题
  21. inventory-management
    2 主题
  22. capacity-utilisation-and-outsourcing
    1 主题
  23. location-and-scale
    2 主题
  24. quality-management
    1 主题
  25. operations-strategy
    4 主题
  26. finance-and-accounting
    business-finance
    2 主题
  27. sources-of-finance
    3 主题
  28. forecasting-and-managing-cash-flows
    1 主题
  29. costs
    4 主题
  30. budgets
    1 主题
  31. financial-statements
    4 主题
  32. analysing-published-accounts
    6 主题
  33. investment-appraisal
    2 主题
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The objectives of private sector businesses

  • Private sector businesses usually aim for commercial success

  • In order to achieve this, they commonly pursue a limited range of objectives 

Common objectives in the private sector

Objective

Explanation

Profit maximisation

  • Most firms have the rational strategic objective of profit maximisation

  • Profit = Total Revenue (TR) – Total Costs (TC)

  • To maximise profits, firms can either increase their sales revenue or decrease their costs

    • Firms continuously analyse their costs to see if they can reduce them so that profit can be maximised

Growth

  • Firms with a growth objective often focus on increasing their sales revenue or market share

  • Firms will also maximise revenue in order to increase output and benefit from economies of scale

  • A growing firm is less likely to fail

Ethics and social responsibility

  • An increasing number of firms are launching with ethical or socially responsible objectives

    • These typically include a focus on climate action & addressing poverty or inequality 

  • They still require profit to survive, but will accept less than if they were profit-maximising as long as they are meeting their social objective

Survival

  • Challenging market conditions and difficult periods of change or crisis can require a focus on keeping the business going

  • Survival is also a common strategic objective for new business start-ups and careful cash-flow management is likely to be at its core

  • The recent pandemic required many businesses to adopt a short-term survival objective, with many taking advantage of government support to enable them to continue trading and recover 

Protecting shareholder value

  • A common objective for public limited companies where the value of shares and dividends payable to shareholders are important metrics 

  • Strategic objectives may seek to protect shareholder value above all else

  • Having this objective will help to encourage new investors and satisfy existing shareholders

Public sector objectives

  • The public sector refers to organisations that are owned or controlled by the government

  • The main goal of organisations in the public sector is usually to provide services such as education, healthcare or emergency services that may not be provided by private sector businesses

  • Public sector organisations tend to be focused on service objectives, including

    • The provision of reliable and efficient services at a reasonable cost

    • Meeting performance targets set by the government

    • Encouraging social and economic development

    • Creating jobs or increasing employment levels

  • Public sector organisations may also set financial objectives to provide a return to the government to reinvest

    • Although not the primary aim, having a positive financial return in the public sector is generally welcomed by governments

The objectives of social enterprises

  • Social enterprises operate in the private sector but do not have making a profit as their primary focus

    • They seek to make a profit in order to spend the money on achieving their social objectives

  • Objectives mayinclude: 

    • Social: to provide jobs and support for disadvantaged groups in society, such as the disabled or homeless

    • Environmental: to protect the environment

    • Ethical: to operate the business in a responsible way

    • Financial: to make a profit to invest back into the social enterprise to expand the social work that it performs

  • Butterfly Books is a social enterprise that publishes children’s educational books in the UK

    • Their aim is to ‘work to educate, inspire and entertain children, aiming to change future generations by reducing gender bias in job roles’

    • A recent book entitled ‘My Mummy is an Engineer’ challenges gender stereotypes