We have already discussed how important Profit motive is for the growth and existence of an entity in the earlier article. We shall talk about the other objectives of a modern day business in this article.
People say, and we believe, that private enterprises are primarily motivated by the objective of profit. It's absolutely correct.
People also say that all other objectives are secondary or facilitative objectives and are meant to be auxiliary to the profit motive. We do not believe them, because we know profit alone cannot remain primary objective in long run. Other factors start kicking in after the business reaches a certain level of growth in the market.
So, if profit alone is not sufficient, what are the other factors that need to be considered.
Take a look below at the factors that need to be considered by the business in the long run vis a vis profit motive.
Survival
Survival is a basic, implicit objective of most organizations. While survival is an obvious objective, it gains more value and prominence during the initial stage of the establishment of the enterprise and during general economic adversity. The ability to survive is a function of the nature of ownership, nature of business competence of management, general and industry conditions, financial strength of the enterprise and so on.
Stability
Another important objective of business enterprises is stability. It is a cautious, conservative objective that is often employed when things are not very conducive. It is a strategy of least resistance in a hostile external environment.
Growth
This is a promising and popular objective which is equated with dynamism, vigor, promise and success. Enterprise growth may take one or more of the forms like increase in assets, manufacturing facilities, increase in sales volume and so on. Growth may take the enterprise along relatively unknown and risky paths, full of promises and pitfalls.
Efficiency
Business enterprises seek efficiency in rationally choosing appropriate means to achieve their goals. In a sense, efficiency is an economic version of the technical objective of productivity – designing and achieving suitable input output ratios of funds, resources, facilities and efforts. Efficiency is a very useful operational objective.
That's all on the other primary objectives of a modern day business entity. Let me know what you think of this ripple in the comments.
Thank You!