1
Q
List the objectives of businesses [9]
A
- Profit maximisation
- Sales maximisation
- Profit satisficing
- Survival
- Market share
- Cost efficiency
- Employee welfare
- Customer satisfaction
- Social objectives
2
Q
Explain profit maximisation. [2]
A
- To produce at a level of output where the surplus of sales revenue over total costs is at its highest
- This supports investors and funds growth
3
Q
Explain sales maximisation
A
- To achieve the highest achievable amount of sales either by volume or value
4
Q
Explain profit satisficing [2]
A
- To make enough profit to be satisfied but not purely motivated by profit
- Businesses may profit satisfice to maintain a work-life balance
5
Q
Explain a business’ objective to survive. [2]
A
- To continue to exist as a business
- This may be the most important objective in the short-term
6
Q
Explain market share [2]
A
- The proportion of total market sales that a firm has
- Market share = Business A sales/market sales x 100
7
Q
Explain cost efficiency
A
- To control costs so that the maximum value of outputs is achievable with the lowest value of inputs
8
Q
Explain employee welfare [2]
A
- To look after the economic and physical wellbeing of the workforce
- Motivation. Positive employer/employee relationship
9
Q
Explain customer satisfaction [2]
A
- To ensure that goods and services meet the needs and expectations of the customer
- Helps build customer loyalty
10
Q
Explain social objectives
A
- To behave in a way which benefits society
