1.5 Business Objectives and Stakeholders
Summary
TLDRThis video explores business and stakeholder objectives, emphasizing their importance for business direction and employee focus. It outlines common private sector objectives such as survival, profit, shareholder returns, growth, market share, and community service. The video also discusses how objectives evolve with business conditions and introduces stakeholders, differentiating between internal and external ones. It highlights potential conflicts between stakeholders' goals, like owners seeking maximum profit versus consumers wanting affordable products, and stresses the need for businesses to balance these interests for survival and success.
Takeaways
- 🎯 A business objective is the aim of the business, guiding its direction and informing employees' actions.
- 🏆 Common private sector business objectives include survival, profit, return to shareholders, business growth, market share, and service to the community.
- 💡 Businesses may adjust their objectives based on circumstances, such as shifting from survival to growth or focusing on service to the community.
- 🔄 Stakeholders are individuals or groups with an interest in a business, differing from shareholders as they can include a broader range of parties.
- 👷♂️ Internal stakeholders, like owners, workers, managers, and shareholders, are directly involved in the business operations.
- 🌐 External stakeholders include customers, government, community, banks, and are not directly involved but can be affected by business activities.
- 🤝 Stakeholder objectives can vary widely, from safe products to regular payments and legal compliance, reflecting diverse interests.
- 🚧 Conflicting objectives can arise between stakeholders, such as owners seeking maximum profit versus consumers looking for reasonable pricing.
- 🔄 Businesses must balance the needs of various stakeholders to ensure survival, as neglecting one group can lead to business failure.
- 🏛 Public sector objectives differ from private sector ones, focusing on financial targets set by government, service provision, quality, and social responsibilities like employment in certain areas.
Q & A
What is a business objective?
-A business objective is the aim of the business, ensuring it moves in the right direction and that its employees and workers understand their roles in achieving the business's goals.
What are the most common objectives for private sector businesses?
-The most common objectives for private sector businesses include survival, profit, return to shareholders, business growth, market share, and service to the community.
Why do businesses need to have objectives?
-Businesses need objectives to guide their operations, ensure strategic planning, and align the actions of employees towards common goals.
How can a business ensure survival?
-A business can ensure survival by creating a solid plan, possibly by lowering prices to compete effectively in the market.
What strategies can a business use to increase profit?
-A business can increase profit by raising prices, improving efficiency, or expanding into new markets.
How can a business grow and make jobs more secure?
-Business growth can be achieved by identifying customer needs, diversifying the business, or investing in innovation.
What is the significance of market share for a business?
-Market share is significant for a business as it can lead to better publicity, increased influence, and potentially higher profits.
How can a business serve the community?
-A business can serve the community by offering products at fair prices, protecting the environment, or participating in charitable activities.
How can external factors affect a business's objectives?
-External factors such as economic downturns, changes in regulations, or global events like a pandemic can force a business to adjust its objectives, possibly shifting focus from growth to survival.
What is the difference between a stakeholder and a shareholder?
-A shareholder is an owner of a part of the business, while a stakeholder is any person or group that has an interest in the business, which can include customers, employees, suppliers, and community members.
Why is it important for businesses to consider stakeholder objectives?
-Considering stakeholder objectives is important because it ensures that the business maintains a balance between the interests of different parties, which can contribute to its long-term success and sustainability.
How can conflicting stakeholder objectives impact a business?
-Conflicting stakeholder objectives can impact a business by creating tension and challenges in decision-making, potentially leading to unsatisfied stakeholders and negative consequences for the business.
What are the common objectives for public sector businesses?
-Common objectives for public sector businesses include meeting financial targets set by the government, providing services, meeting quality targets, and contributing to social goals such as employment in certain areas.
Outlines
📈 Business and Stakeholder Objectives Overview
This paragraph introduces the concept of business objectives, which are the aims that guide a company's direction and operations. It explains that businesses require objectives to ensure they are progressing appropriately and that their employees are aligned with these goals. The video discusses various common objectives for private sector businesses, such as survival, profit, return to shareholders, growth, market share, and community service. Examples are provided to illustrate these objectives, and the importance of adapting these objectives based on the business's situation is emphasized. The paragraph also transitions into discussing stakeholders, who are individuals with an interest in the business, and differentiates between internal and external stakeholders. It uses the example of a nuclear power plant to demonstrate how stakeholders can be affected differently by business decisions.
🤝 Balancing Stakeholder Interests for Business Success
The second paragraph delves into the complexities of balancing the interests of various stakeholders. It highlights the potential conflict between the objectives of business owners, who may prioritize profit maximization, and consumers, who seek reasonable pricing and quality. The importance of businesses adapting their objectives to satisfy a diverse range of stakeholders is underscored, as relying solely on satisfying one group, such as owners, could lead to the dissatisfaction of others, like customers, and ultimately business failure. The video also contrasts private sector objectives with those of the public sector, which include financial goals set by the government, service provision, meeting quality targets, and social responsibilities like employment creation. The summary concludes by encouraging viewers to use the video in conjunction with their notes and textbooks for a comprehensive understanding of business objectives.
Mindmap
Keywords
💡Business Objectives
💡Stakeholder Objectives
💡Survival
💡Profit
💡Return to Shareholders
💡Business Growth
💡Market Share
💡Service to the Community
💡Stakeholders
💡Internal and External Stakeholders
💡Public Sector Objectives
Highlights
Business objectives are essential for businesses to ensure they are moving in the right direction and employees know their roles.
Private sector businesses commonly have objectives such as survival, profit, return to shareholders, business growth, market share, and service to the community.
Businesses may lower prices for survival or increase them for profit and shareholder returns.
Growth objectives can be achieved by identifying customer needs and diversifying the business.
Market share objectives can be pursued through advertising and growth strategies to increase influence and profit.
Service to the community can involve marketing products at fair prices, environmental protection, or charitable activities.
Business objectives can change over time based on the company's situation, such as shifting from survival to growth or profit.
Stakeholders are individuals or groups with an interest in the business, differing from shareholders.
Examples of stakeholders include owners, workers, managers, customers, government, community, banks, and shareholders.
Stakeholder objectives can vary, such as safe and reliable products, regular payments, legal compliance, and business growth.
Internal stakeholders are directly involved in the business, like owners, workers, managers, and shareholders.
External stakeholders, such as customers and government, do not directly benefit from the business and may not be affected if it fails.
Businesses must balance the objectives of different stakeholders to ensure survival and avoid conflicts, like between owners and consumers.
Adapting business objectives to suit various stakeholders is crucial for a business's survival and success.
Public sector businesses have different objectives, focusing on financial, service, and social aspects set by the government.
It's important to understand the different objectives for private and public sector businesses.
Transcripts
hello everyone in this video i'm going
to be looking at
unit 1.5 business objectives and
stakeholder objectives and we're going
to look at the following
points so business objective
a business objective is the aim of the
business and obviously businesses need
objectives to make sure that they are
going in the right direction
and that their employees and workers
know what they are doing for the
business
so we're going to look at the different
objectives that businesses might have
and how actually businesses do not have
the same objectives
for private sector businesses the
following objectives are the most common
survival profit return to shareholders
business growth market share and service
to the community
now here are some examples there are
much more examples in your textbooks as
well
but why do the businesses have the
objectives so obviously survival
to make sure that they have a plan for
the business and maybe they can do this
by lowering their prices
profit they need to pay return to the
owners maybe they can do this by
increasing their prices
return shareholders shareholders get
profits and they won't sell the shares
maybe it'll bring track to more
shareholders maybe they could do this by
increasing the profit
and increasing the share price for new
um
shareholders growth means businesses
have this objective to make jobs more
secure and maybe they can do this by
identifying customer needs or
diversifying their business
market shares can be good for good
publicity and
to increase their influence and they
might achieve this by
advertising and by growth and increase
of profit
maybe by providing service to community
they might want to help the market
uh market their product at a fair price
or maybe protect the environment or
maybe even for publicity
they could do this by recycling
providing jobs or even by giving to
charity
the business objectives always stay the
same now business owner has survived for
three years maybe they want to change
their business objective to
growth or to profit a business has
achieved higher market share
so maybe they have already achieved that
so maybe they want to move to service to
the community or giving back to
things like that a business is under
threat from code of 19
maybe they are moving from profit or
growth maybe back down to survival
because their business is under threat
so objectives always constantly change
depending on the situation
another thing that affects businesses is
stakeholders now
a stakeholder is different to a
shareholder a stakeholder is any person
has an interest in the business
for example there is plan for a nuclear
power plant to be built on natural land
five kilometers away from the city
centre and which stakeholders are
affected by this and why
now obviously the manager of the the
nuclear power plant
is someone who has a an internal
um an internal interest in the business
because they are involved in the
business
um and they would be interested in this
whereas maybe
the local government would not we would
be a bit worried about this because the
nuclear power plant is going to be so
close
to the natural land
now we have following stakeholder
examples owners
workers managers customers government
whole community banks and shareholders
we have got some stakeholder objectives
on the right hand side
now safe and reliable products which
stakeholders would want that
obviously maybe customers the owners
would also want that and maybe the
managers
maybe the whole community would want
that subjective regular payment
we are definitely the workers would like
regular payment managers as well
probably the shareholders too
firms to stay within the law i think the
government would definitely want that
uh growth of the business maybe the
banks would want that the whole
community maybe the managers
there's lots of different objectives
that different part people within
the company the stakeholders would be
interested in
now there are two different types of
stakeholders internal and external i've
got some examples here
internal external internal stakeholders
are people
oh pardon me internal are people who
are um intricately involved so it
actually does not include
customers it includes owners workers
managers and shareholders because they
are all relying
on the business directly for um for
things like wages and money whereas
external stakeholders
for example customers government
community banks i've got gospels twice
now
these are people who don't directly
benefit from the
business and if the business fails
they're not going to necessarily be
directly affected so internal is from
within and
external is from outside the business
now some businesses will have a um
stakeholders that disagree so let's look
at this example of an oil company
we've got the owners of the company
they're likely to want the business to
work towards as much profit as possible
now they are maybe going to be a in
conflict with the objectives of the
consumers
who will want reasonably priced products
of an appropriate quality or they may
buy goods from the competitors
so we need to make sure that businesses
they um
are fair to all of the stakeholders so
that they are able to
survive so businesses must adapt their
business objectives to suit different
stakeholders because they rely on a
variety of stakeholders to make sure
their business survives
so they can't just make sure that the
objectives of the owners are satisfied
because that might dissatisfy the
customers
and if no one buys their product then
obviously the business will fail
so just to remind you about private
sector objectives are these six
their public sector objectives are
slightly different
so public sector businesses the
following objectives are the most common
financial so meeting a profit set by the
government providing a service
meeting quality targets set by the
government and social providing quality
er precise providing employment in
certain areas
you need to know the different
objectives for private and public sector
businesses
that's the end of this video please use
this video in conjunction with your
notes and with your textbooks
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