Objective of Business Organisation

Topics: Economics, Management, Term Pages: 2 (496 words) Published: March 27, 2013
A study of the organization’s objectives helps to understand how it is likely to respond to changes in its environment. It is often assumed that business organizations will always try to maximize their profits through a combination of maximizing revenue and minimizing costs. The profit maximization objectives must be qualified by a time dimension. A firm that pursuing a short-term profit-maximizing objective may act very differently to one that seeks to maximize long term profit. This may be reflected in a differing emphasis on research and development, new product development and market development strategies. However, the ability of organization to pursue long-term profit-maximizing objectives is influenced by the nature of the environment in which it operates. For instance, an organization operating in a relatively regulated environment such as patented medicines will be in a stronger position to plan for long-term profit maximization than one is operating in a relatively unpredictable and competitive market. In order to grow a business needs to increase their share of competitive markets. Marketing plans start with the overall strategic business plan of a company, but explain further how specific aims will be carried out. Marketing plans address this through defining product or service offerings, researching target markets, analysis of competition, then strategically placing, pricing and promoting the company offering. For instance, it may cut prices and increase promotional expenditure, accepting short-term losses in order to drive its main rivals (competitor) out of business, leaving it relatively free to exploit its market in the long term. As an organisation grows, so does the power and responsibility of individual managers in terms of salaries and career development. Growth strategy may appear very attractive to employee not only for their own self advancement but also as an aid to attract and retain high calibre employee. For instance, Google Inc. has...
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