Podcast
Questions and Answers
What is the primary objective of profit maximisation?
What is the primary objective of profit maximisation?
Survival is more important than profit for all businesses.
Survival is more important than profit for all businesses.
False
Name one way to maximise profit.
Name one way to maximise profit.
Increase sales or reduce costs
Customer satisfaction is vital for the ___ of any business.
Customer satisfaction is vital for the ___ of any business.
Signup and view all the answers
Match the business objectives with their descriptions:
Match the business objectives with their descriptions:
Signup and view all the answers
Which objective may require reducing the selling price of a product?
Which objective may require reducing the selling price of a product?
Signup and view all the answers
Public sector organizations aim to provide quality service primarily for profit.
Public sector organizations aim to provide quality service primarily for profit.
Signup and view all the answers
What must businesses do to improve customer satisfaction?
What must businesses do to improve customer satisfaction?
Signup and view all the answers
In order to maximize profits, businesses can either increase sales or ___ costs.
In order to maximize profits, businesses can either increase sales or ___ costs.
Signup and view all the answers
Which objective is focused on ensuring long-term survival through innovation?
Which objective is focused on ensuring long-term survival through innovation?
Signup and view all the answers
Which of the following is NOT a responsibility under corporate social responsibility (CSR)?
Which of the following is NOT a responsibility under corporate social responsibility (CSR)?
Signup and view all the answers
Social enterprises aim to make as much profit as possible.
Social enterprises aim to make as much profit as possible.
Signup and view all the answers
What is the term for the percentage of total sales in a market that a business has?
What is the term for the percentage of total sales in a market that a business has?
Signup and view all the answers
The body shop does not test on __________.
The body shop does not test on __________.
Signup and view all the answers
Match the following CSR examples with their corresponding responsibilities:
Match the following CSR examples with their corresponding responsibilities:
Signup and view all the answers
What does a business often seek to achieve by growing?
What does a business often seek to achieve by growing?
Signup and view all the answers
The NHS is an example of an organization that aims for exceptional results rather than satisfactory ones.
The NHS is an example of an organization that aims for exceptional results rather than satisfactory ones.
Signup and view all the answers
What term describes managers pursuing their own aims within a large organization?
What term describes managers pursuing their own aims within a large organization?
Signup and view all the answers
Businesses can attract high-quality staff who believe in the ethics of the business by practicing __________.
Businesses can attract high-quality staff who believe in the ethics of the business by practicing __________.
Signup and view all the answers
Which of the following is a reason businesses aim to increase their market share?
Which of the following is a reason businesses aim to increase their market share?
Signup and view all the answers
Study Notes
Business Objectives
- Businesses exist to make a profit but some prioritize survival and economic downturn can lead to businesses failing.
- Profit Maximisation: Businesses aim to earn more from their sales than they spend on costs. To maximize profit, businesses can increase sales and/or reduce costs.
- Sales Maximization: Management may aim to achieve personal goals instead of business objectives, such as maximizing sales even if it means lower profits.
- Providing a Quality Service: Businesses cater to their customer's needs, either to encourage repeat business or to fulfill societal needs.
- Customer Satisfaction: Satisfied customers are more likely to return, generate positive word-of-mouth, and be less responsive to competition.
- Enterprise: Businesses continuously innovate to stay competitive and improve performance.
- Corporate Social Responsibility (CSR): Businesses actively engage in ethical and beneficial actions for both society and the environment.
- CSR Advantages: A good reputation, attracting customers who align with the business's ethics, and attracting qualified personnel who share similar values.
- CSR and the Environment: Companies like The Body Shop, M&S, McDonald's, and car manufacturers are actively working to reduce their carbon footprint.
- Growth Objectives: Businesses strive to grow for many reasons, including avoiding takeover, minimizing failure risk, becoming market leaders, increasing profits, eliminating rivals, and leveraging economies of scale.
- Increasing Market Share: Market share represents the percentage of total sales a business controls in a market. Achieving market leadership comes with significant advantages.
- Social Enterprise: These organizations are not charities but prioritize social objectives over profit maximization. Their surplus may be reinvested into the business or to support the community.
- Satisficing: A concept coined by Herbert Simon, this denotes aiming for a satisfactory result rather than an exceptional one. This approach is often used by organizations like the NHS to constrain expenses without drastic cuts.
- Managerial Objectives: In large organizations, individual managers may pursue their own ambitions, such as salary increases or promotions, as long as their actions benefit the overall business objectives, like increased sales or profit.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz explores the various objectives that businesses prioritize for success, including profit maximization, sales maximization, and customer satisfaction. It also examines the importance of providing quality service and engaging in corporate social responsibility. Test your understanding of how these elements contribute to a sustainable business model.
