Chapter 4: Business Objectives Brain Map

4.1 Importance of Objectives

- Direction and purpose for employees
- Targets for business strategies
- Means of assessing success or failure

Objectives of Private-Sector Businesses

Objective Key Concepts
Profit Maximization
– Increased revenue and returns for investors
– Incentive for innovation and business growth
– Encourages risk-taking

Profit Satisficing
– Aim for satisfactory profit

– Common for small businesses

– Emphasizes work-life balance

Growth
– Benefits for managers and owners
– Challenges with rapid expansion

Increasing Market Share

– Indicator of success

– Benefits of being a brand leader

Survival
– Key objective for startups

– Allows establishment of long-term goals

Corporate Social Respon-

sibility (CSR) – A wider perspective than just profit
– Consideration of social, environmental, and ethical issues

Case Study 4.1 - Air Mauritius CSR Initiative

– Sustainable development objectives
– ’One Takeoff, One Tree’ program
– Positive reactions from consumers and stakeholders

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– Linking CSR with triple bottom line principle

Triple Bottom Line Principle

– Evaluates performance in three dimensions: economic, social, and environmental

– Balances profit with social and environmental impact

Objectives of Social Enterprises & Public-Sector Businesses

Objectives of Social Enterprises Objectives of Public-Sector Businesses
Economic (Financial) Efficient, reliable service to the public
Social Economic and social development
Environmental Employment creation
Financial targets set by the government
High environmental standards

SMART Criteria for Effective Objectives

Specific Focus on what the business does
Measurable Quantitative value
Achievable Objectives should be achievable
Realistic and Relevant Realistic with available resources
Time-Limited Set time limit for assessment

Factors Determining Business Objectives

Business Culture
Size and Legal Form
Private Sector or Public Sector
Number of Years in Operation
Impact on decision-making, Concerns and pri-
orities
Different objectives and measures
Evolution of objectives

Decision-Making Framework
Set Objectives Provide focus for strategic decisions.
Assess and Clarify Identify the problem and strategic solutions.
Gather Data Analyze impacts on achieving objectives.
Make Strategic Decision Choose the course of action.
Plan and Implement Execute the decision.
Review Success Evaluate against original objectives.

Ethical Decisions in Business

Benefits
Good publicity and increased sales
Attracts ethical customers
More likely to be awarded government
contracts
Limitations
Short-term cost increase
Potential loss of significant sales
Bad publicity and reduced sales