This may result in the non-cooperation of affected people against the malpractices of business enterprises. Hence they should focus on multiple objectives.
Some of the objectivs are as follows :
(a) Market standing : It refers to the position of business enterprise in the market with regard to its competitors. The business enterprise should work hard to maintain its position in the market.
(b) Innovation : If a business enterprise desires to win the confidence of its customers and goodwill in the market, it has to adopt the concept of innovation. Innovation is an introduction of new ideas or methods in a way something is done or made. In business there are broadly two kinds of innovations.
(i) Innovation in product or service.
(ii) Innovation in the various skills and activities needed to supply them.
(c) Profitability : It refers to profit in relation to capital investment. Every business must maintain minimum level of profitability in order to survive in the market.
(d) Productivity : It is used as a measure of efficiency. It is calculated by comparing the value of output with the value of input.
(e) Physical and financial resources : Any business requires physical resources like plants, machines and offices etc. and financial resources to be able to provide products and services to the end user. Thus, to acquire and use these resources efficiently become very necessary.
(f) Manager performance & development/ Worker performance & attitude : Manager's performance is an important parameter in the success of business. However, this is not possible without the efficient and positive performance of workers. Workers' performance and attitudes determine their contributions towards productivity and profitability of any enterprise.
(g) Social responsibility : Social responsibility refers to the obligation of business firms to contribute resources for solving social problems and work in a socially responsible manner.
Hence, a business enterprise must have multiple objectives to satisfy different individuals and groups, for its own survival and prosperity.
Causes of business risks are as given under :
1. Natural causes : Human beings have little control over natural calamities like flood, earthquake, lightning, heavy rains, famine, etc. they result in heavy loss of life, property and income of business.
2. Human causes : Human causes include such unexpected events like dishonesty, carelessness or negligence of employees; stoppage of work due to power failure; strikes, riots;
3. Economic causes : These includes uncertainties relating to demand for goods, competition, price, collection of dues from customers, change to technology or method of production, etc. Financial problems like rise in interest rate for borrowing, levy of higher taxes, etc. also come under this type of causes as they result in higher unexpected cost of operation of business.
4. Other causes : These are unforeseen events like political disturbances, mechanical failures, such as the bursting of boiler, fluctuations in exchange rates, etc. which lead to the possibility of business risks.
1. Profit Motive: Business means production, purchase and sale of goods with profit motive. Earning profit for satisfying needs make the business an economic activity.
2. Business activities require use of scarce resources: To run business concern the owner must have adequate capital, raw materials, skilled workers. Business requires sufficient funds to be invested in it. All these activities involve monetary transactions. So business is an economic activity.
3. Satisfying human wants: Business is a source of income for businessmen and their families. Business can, therefore, be regarded as an economic activity not only as a means of earning income by businessmen but also as a means of satisfying the wants of people.
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