Question No. 3 Define Business. Explain The Objective/Functions Of Business.
Objective/Functions of Business
The Objective of Business Means the Purpose for Which Business Is Established. It Is Generally Believed That The Main Objective Of Business Is To Make Profit And Avoid Loss. We Do Admit That Profit Is A Motivating Factor In Any Business Activity But It Is Not The Sole Objective Of Any Business. A Business. A Business Which Hunting Profit And Ignores Other Objectives, It Will Not Be Fare Practice To Community.
“Business Objective Means Any Goal That An Organization Or Group Seeks To Achieve.”
“Business Is Not Mere Money Chasing But It Should Also Aim At Serving the Community,”
(Prof. Henry Ford)
We Here Classify The Objectives Business Under Three Heads.
- Economic Objectives
- Social Objectives
- National Objectives
A. Economic Objectives/Functions
Business Being an Economic Activity Has Primary of Economic Nature .Business has The Following Objectives from Economic Point Of View.
1. Profit Earning:
The Primary Objective Of Business Is To Earn Any Business, Which Does Not Earn Profit, Cannot Be Stayed In The Market For A Longer Period. Business Man Should Earn Reasonable Profit From His Business.
Following Are Important Reasons For Earning Profit.
- To Fulfill The Personal Need Of The Owner.
- It Creates The Spirit Of Hard Work.
- For Expansion and Development Of The Business.
- To Earn RIZQ-E-HALAL.
- For Increasing National Income.
2. Economical Production;
The Second Very Important Economic Objective In The Eyes Of Management Is To Control The Cost Of The Sale Through Economical Production To Get The Higher profit. Now a Day reduction In Cost In Main Issue To Compete The National And International markets.
- Technological Improvement;
One the Objectives Of Business Is The Technological Improvement. For The Long Stay Of Business The Market New Design And Techniques Of Product Are Very Necessary. So Invention As Well As Innovation Is The Part Of A Good Business.
4. Use of Resources;
The Objective of Every Business Is to Make the Best Possible use Of Scare Resources Such As Men, Machines, And Martial. The Business Should Find Ways And Means Of Making The Best Possible Use Of Resources At Its Deposal. Business Tries To Make Best And Optimum Combination Of Factors Of Production(Land, Labor, Capital And Organization Etc .)
5. Creating Markets;
Another Objective Of The Business Is To Create The Customers For Its Products. It Is Done Through Advertising And By The Provision Of Standard Quality Goods At Reasonable Price. If There Are More Customers Then There Will Be More Profit.
6. Stability of Business;
Stability Of Business Is Also An Economic Objective. A Stable business Can Easily Face Different types Of Crisis Such As Financial and Managerial Etc.
- Social Objectives/Functions
Business Is Established In Society And It Is An Important Part Of Society. So, If Business Performs Its Function In Society Then It Should Not Forget Its Responsibilities Towards Society. The Important social Objectives of Business Are As Follows;
7. Quality Products
The Main Social Objective Of Business Is To Supply The Standard Quality Product To The Society. If The Business Is Producing Inferior, Substandard and Adulterated Goods, It Will Be Against the Business Ethics, Business Facilitates the Society by Providing Following Important Services;
To Provide Goods of Latest Design
To Provide Goods at Lower Prices
To Provide Goods in All over the Country
To Save The Society From Harmful Effects For Example Pollution Etc.
To Help And Encourage The Cultural Activities.
Generation Of Employment Is One Of The Social Objectives Of The Business. Now A Day, the Employment Is the Biggest Problem of Society. Business Should Provide Employment To More And More People Living In The Country. Handicapped And Disabled People Should Given Extra Care. Business Creates Employment Opportunities for the Following;
Expert/ Professional Such As Doctors, Professors, and Transporters Etc.
Middlemen, Traders and Agents.
Employees of Supporting Institutions Such As Bankers, Insurer and Transporters Etc
9. Welfare of Employees;
Welfare Of Employees Should Also The Social Objectives. This Objective Achieved By Providing Goods Working Remuneration, Housing And Medical Facilities, For Security After Services For Employees. On Fulfillment Of This Objective, Efficiency Of Employees Is Expected To Be Improved And As A Result The Portability Is Also Expected To Be Improved.
10. Apprentice Training /Training Facility.
Apprentice Training Is A Social Objective Of Business. The Owner Can Provide Training To Jobless Men, Women And Disable Person. The Trained Workers Can Seek Jobs Or They Can Start Their Own Business To Reduce Rate Of Unemployment In The Country.
11. Safety Measures;
Safety Measures For Employees Are Treated As Social Objectives. Measures Are Adopted To Protect The Life Of Employees And General Public.
12. Avoidance of Pollution;
The Avoidance of Pollution, Which Is Connected, With Industries Should Also Be Very Important Objective of Business. Every Business Should Take The Necessary Steps So As Prevent Air And Water Pollution In The Interest Of Society. Otherwise, Even We Cannot Imagine Quality Life Style.
13. Welfare of Society;
Business Units Should Work For The General Welfare Of The Society. This Objective Can Be Achieved By Making Donation To School, Colleges, Training Centers, and Hospitals Etc. The Business Units Can Also Encourage Intelligent Students For Higher Education By Providing Them Educational Scholarship.
C. National Objectives/Functions
The National objective is to achieve full employment level. The business can provide employment to the people because of qualification, skill and experience. Thus, business generates full employment condition in the economy.
15. Use of Idle Resources:
Optimal utilization of idle resources is a nation objective of a business. The oil, gas, coal and iron-ore are idle resources. There is a need of money, machinery, men, and methods to make such items for the benefit of mankind. Business organizations have potential to do this job.
16. Business Rules:
Government makes the rules for smooth running of business Rules may relate to Registration and operations of business. So businessman must follow up the rules to get the nation objectives.
17. Price stability:
Price stability is a very important national objective of the business. The stable price level at home is helpful in maintaining the foreign exchange rate. The price stability brings economic stability in the country.
18. Balance of payment:
Another important function and objective of business is to make balance of payment favorable by increasing the exports and decreasing the imports. A good businessperson has option to select the best from different alternatives.
19. National Income:
All businesses have the purpose of nation interest. They secure their nation benefits and perform objects the make strong their nation. Some business purely works. For making strong the economy and defense system of the country. Such businesses are purely established under the supervision of government such as;
- Industry of weapons for defense.
- Modern institutions for research such as Pakistan agricultural research council. (PARC)
20. Economic Development:
All the business activities have their ultimate target of economic development of the country. The optimal use of local and foreign resources is possible only with the help of business. A successful business and profitable business helps in the economic development of country in following ways;
- Favorable balance of trade and payment
- Availability of goods
- More investment
- More employment
- More national income
- Economic development
From the above discussion, we conclude that, all of the above objectives are equally important at some time or the other depending on number of internal external factors. How much time, efforts and energy should go in pursuing a particular objective is to be decided by the business itself.