Q1. What is Economic objective of Business?
Ans. Business is an economic activity and its objectives are mainly economic in nature. the main economic objectives are:
- Earning Profit: One of the objective of business is to earn profit on capital employed. Profitability refers to profit in relation to capital invested. Every business must earn reasonable profit which is so important for its survival and growth.
- Market Standing: It refers to position of an enterprise in relation to its competitors. A business enterprise must aim to standing on stronger footing in terms of competitive product to its consumers.
- Innovation: It is new ideas or methods in way something is to be done or made. There are two kinds of innovation-Innovation in product or service and Innovation in various skills and activities needed to supply products. No business enterprise can flourish in competitive world without innovation.
- Productivity: Productivity is ascertained by comparing value of output with value of input. It is used as measure of efficiency. In order to ensure continues survival and progress, every enterprise must aim at grater productivity through best use of resources.
- Physical and Finance Resources: Any business requires physical resources like plants, machines, offices and financial resources, i.e., funds to be able to produce and supply goods and services to its customers. The business must aim at acquiring these resources according to their requirements and use them efficiently.