BM Unit 1 - LO1 1

Learning Intention

Understanding business objectives & stakeholders

BM Unit 1 - LO1 2

Business Objectives

Survival Profit Maximisation

A firm decides on the price and output level that would generate the greatest profits

Growth Good Reputation Sales Maximisation Social Responsibility

An assumed obligation toward the good of society, the environment, consumers, employees, communities etc…

Providing a Service Managerial Objectives

BM Unit 1 - LO1 3

Stakeholders

Internal Shareholders/

Owners Managers Employees

External Suppliers Customers Banks/lenders Society/Local

Community National

Government Local Government Taxpayers Donors (Charities)

Individuals who are

involved in the internal

operations of the business

Individuals who are not involved in the internal

operations of the business

4

Stakeholders’ Interests

Shareholders - dividends, capital growth, improved share value, successful company

Customers - low prices (value for money), high quality products, good service

Managers – salary, job security, fringe benefits, job satisfaction

Suppliers - regular orders, prompt payment Employees - job security, pay and conditions, bonuses Government - payment of taxes, compliance with laws,

provision of jobs, generation of wealth, social & economic benefits

Community - corporate responsibility, employment opportunities, environmental responsibility

Banks - ability to make payments for loans, financial stability Tax Payers – publicly funded bodies; ensure taxes used

effectively

BM Unit 1 - LO1 5

Stakeholders’ Influence

Shareholders - voting rights at AGM, protest again decisions, sell shares, approve dividend payments

Customers - taking their business elsewhere, recommendations

Managers - day-to-day decisions, product portfolio, staffing, industrial relations

Suppliers - period of credit, level of discounts, price Employees - possible industrial action, standard of work Government – compliance with legislation, equal

pay/minimum wage etc…, interest rates Community - protest movements, direct action,

petitions Banks - granting of loans and rate of interest Tax payers – voting for political parties

BM Unit 1 - LO1 6

Class Questions

Identify and describe three different types of business organisations (6 marks)

List three advantages and three disadvantages of running a public limited company compared to running a private limited company (6 marks)