1.5 Business Objectives and Stakeholders

Summary

This 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.