IGCSE Business Studies Notes

Chapter 5- Business Objectives and Stakeholders Objectives

Business objectives
Business objectives are the aims and targets that a business work towards to
help it run successfully.
Although business objectives does not always guarantee success, it has certain
benefits.

Benefits of setting objectives

• Owners will have a sense of direction as to where to take the business to

and what steps are necessary to reach there.

SMART OBJECTIVES
Objectives are said to be SMART, if they fulfill certain criteria (condition) listed
below:
S-Specific- Stating clearly what is trying to be achieved
(defining the objectives clearly)
M-Measurable-Capable of numerical measurement
(can be expressed in terms of numbers)
A-Achievable-Attainable by the people involved
(can be achieved with the help of owners and employees)
R-Realistic and relevant-Able to be achieved with the given resources
(can be achieved with the available resources of the organisation)

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T-Time specific-state a time by which they should be achieved (a time limit

should be given to achieve these objectives)
Example----Increase market share by 10% next year

OBJECTIVES OF THE PRIVATE SECTOR

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Also known as ‘corporate social responsibility’

Corporate Social responsibility ( CSR )
Businesses taking responsibility for the impact their activities might have on
society and the environment
This concept has gained importance because of the following reasons:
• Activity of pressure groups
• The role of media
• The role of trade union and other employee representing groups
• The role of government and the laws passed by them
Social enterprise
• A business with social objectives that reinvests most of its profits back
into the business or into benefiting society at large.
• They have profit as an objective but unlike other private sector
businesses, their profits are re-invested back into the business.
• This allows them to expand their activities or benefit the local
community rather than earning high profits for the owners or
shareholders.
• They can be small or large businesses or operated as Cooperatives
(formed by a group of members having common interests)

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i. INTERNAL STAKEHOLDERS
1.Shareholders or owners

2. Workers/Employees

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3. Managers

i i External stakeholders
1. Customers

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2. Government

3. Banks/Lenders

4. Community

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5. Suppliers
The suppliers provide materials to the business on cash or credit basis.
• They are interested to know whether the business has enough funds to
pay their short-terms debts
• If the business becomes successful and expands, the suppliers will
benefit- as the business will require more inventories from the suppliers
• However, a business may ask for discounts for bulk purchases

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