question_answer

9. Explain the economic and social objectives of the business.

Answer:

Ans.     Economic Objectives:

(a) Creating consumers: It means producing and distributing such useful goods and services which satisfy the consumers.

(b) Innovation: Innovation includes production of new products, replacing older products with latest and with new ones, improvement and modernisation in production methods so as to improve quality and/or reduce cost.

(c) Effective utilisation of Resources: A business tries to minimise and optimise its resource usage so as to minimise the cost and maximise the profits. By reducing cost and increasing profits, it ensures survival, growth, expansion and diversification,

(d) Earning profits: According to Dicksee, "Business is a form of activity pursued primarily with the objective of earning profit for the benefit of those on whose behalf activity is conducted.

(e) Creating Goodwill: When a business is able to make good profits and other economic activities, its goodwill amongst investors and competitors goes up.

Social Objectives:

(a) Quality product: A business aims at providing quality product so that it has good demand in the market and consumers feel satisfied to consume it. Inferior goods do not satisfy consumers.

(b) Environment protection: Another social objective of a business is protecting the environment from pollution of any kind and to ensure that nonrenewable resources are not depleted.

(c) Fair and reasonable price: Prices must be fair and reasonable. Business aims at maximizing social satisfaction in right sense instead of maximizing profit.

(d) Generating employment: Business activities aim at providing employment opportunities for entrepreneurs and self-employed persons. Who provide some goods and services to businessmen?

(e) Social security: Businessmen follow certain social welfare programmes like group insurance, provident fund, pension fund, medical facilities of employees, etc. it enhances social security.

(f) Good industrial relations: Employees are an important part of an organization. Their problems and grievances must also be considered, while running a business. Business must aim at building sound industrial relations.