May 28, 2022

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OBJECTIVES OF BUSINESS ENTITY

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OBJECTIVES OF BUSINESS ENTITY

The objectives of a business entity is the desires or ends the entity wants to attain. Objhectives are usually set for a long periods of time and broken down into short term gords of three months each.

Without an objective, a business will not have direction. The advantages of objectives can never be over emphased. Objectives shows the purposes and aims of an entity, it provides directions for the proper functioning of the business, helps coordinates decisions to be made and aid control.

TYPES OF OBJECTIVES

There are two major types of objectives:

(1) Primary objectives and

(2) Secondary objectives.

PRIMARY OBJECTIVES

The number one objective of a busines entity is profit making. Profit is the reward of the efforts of the owner of a business and/or it’s managements. Pofgit, if not drawn by the owner and paid out as dividend is the must secured wasy a business can use for growth and expansion.

SECONDARY OBJECTIVES

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(1) PRODUCTIVITY

A business entity have a pre-determined level of output they proposed to acheive a year. The management strive to utilize a given set of resources in an efficient manner to achieved it’s planed productivity.

(2) INNOVATION

This is the applicatin of the conceptual skills of managers to see the big picture on how they can strategized to meet and satisfy the needs of the consumers better than their competitors in areas such as products, new methods of production and distribution.

(3) MARKET SHARE:

A business concern should be interested in increasing market share from it’s present number of customers to a higher number. Through market segmentation and market penetration.

(4) EMPLOYEE SATISFACTION

Employees are the most delicate resources of a business and also the most important. Despite the fact that machines have taking over most productive aspect of humans in most developed countries. Such machines also required maintainance by humans which also means the human factors of production can never be put aside. Therefore, it is necessary for business owners and managers to ensure the care, motivation and satisfaction of employees.

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(5) PUBLIC IMAGE/GOODWILL

Businesses strive to maintain positive image in the community where they are located, in the country as a whole and in the world at large. Entities strive to maintain it’s image as a good citizen by producing high quality goods, participating in social responsibility in the community, and sponsoring special events.

SHAREHOLDERS SATISFACTION

Companies ensures shareholders are satisfied by increasing their returns on investment through capital and gains and dividends and by reducing risk of investments.

GROWTH

An important objectives of a business is expansion of it’s operations. Failure to expand is like faling to become grown up but remaining as a child. This done by increasing the number of people employed, the market share, and net assets.

Further reading:

learn about types of financial risks that can affect your business.

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keeping financial transactions for small business.

going concern and the financial statement.

six ways you can control your spendings.

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