Business:

An economic activity done with the motive of earning profit and creating and maximizing wealth is known as business.
Objectives of business can be classified in two parts. They are:
(A) Economic objectives
(B) Social objectives

(A) Economic objectives:

1. Objective of profit:

• Earning profit, is one of the key objectives of business.
• Earning profit is necessary for both survival and growth of business.
• Profit can be called the motivating force, barometer of efficiency and life blood of business.
• However in today’s time rather than just maximizing the profits the concept of fair (reasonable) profit is more accepted.
• It is highly essential for a business to focus on earning ‘fair profit’ i.e. a reasonable profit in order to survive and get acknowledged in the society.

2. Maximization of wealth:

• In shorter runs say at the end of year the objective of business can be annual income, i.e. net profit. However in longer run say about at the end of five years or so a businessman aims at creating wealth and maximize.
• In order to achieve the long term goals of wealth creation and maximization, the business should adopt a broader view and give up the sole focus of profit, especially in times of depression like situations in the market.

3. Other economic objectives:

Business also has other economic objectives like economic growth and development of business, market expansion, optimum utilization of resources, adopting modern technology and practices, etc. to boost the business.

(B) Social objectives of business:
Business exists due to existence of society. With this respect, a business needs to acknowledge the existence of society and try to fulfill certain social objectives other than pure objective of profit. These social objectives could be following fair trade practices, providing employment oportunities, providing quality goods and services, etc.

Some of the social objectives are:
1. Objective of social responsibility:

• Business is not an independent activity. It interacts with various groups/ classes of people of society associated with business directly or indirectly but with different interests. Business interacts with owners, employees, creditors, government, etc.
• It is quite important to take care of the interests of these different groups of society.
• To do so, business has abide by the laws to maintain the business environment, follow the Employee Welfare Act, Factory Act, Consumer Protection Act, etc.
• Factors like rise in consumer awareness, rules and restrictions imposed by state, consumer associations and increased education compel a business to fulfill these social responsibilities.

2. Objective to provide opportunity of employment.

• With increasing unemployment, some business units are established to create new opportunities of employment.
• For example, Khadi and Village Industries Commission (KVIC), a Government of India body encourage those industries that provide ‘ employment opportunities. KVIC gives preference to those business units that are established in backward/rural areas for providing employment to the unemployed.

3. Objective to provide quality goods and services:

• Business aims at providing quality goods and services to people in order to satisfy their needs.
• For example, units that manufacture spices used for cooking food, food products, cold drinks, etc. need to maintain very high quality standards. Moreover, business units also need to provide quality services. For example, after sales service, installation assistance, setting up service centers, etc.

4. Objective to adopt fair trade practices:

• A business unit should see that it does not fall into practices that are against the well-being of society. For example, black marketing, hoarding, misleading advertisements, creating artificial scarcity, etc. are unfair practices and hence should be avoided.
• A businessman should adopt only fair trade practices in the welfare of customers and society.

5. Other objectives:

• To establish a specific identity in the society.
• Conduct research in production activities.
• Help in the economic development of nation and co-operate with the government.
• Provide various incentives to the employees and execute welfare schemes for them.