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Objective / Function of Business
Objective or function of business means the purpose for which the business is established or run. Following are some important objectives or functions of the business.
The main objective of business is to earn profit. Businessmen go on searching profitable channels to invest their capital. Business should create wealth and earn profit without harming the society and fellow businessmen. If a business is producing inly loss then it is closed or dissolved. Following are important reasons for earning profit:
- To fulfill the personal needs of the owner
- It creates the spirit of hard work
- For expansion and development of the business
- Ro earn RIZQ-E-HALAL
- For increasing National Income
Business benefits the people by providing them large number of services. Businessmen use modern techniques to produce the quality goods at lower cost. Business facilitates the society by providing it following important services:
- To produce and supply of quality and standard goods
- To provide goods according to the latest design and fashion
- To provide goods at lower prices
- To provides goods in all areas of areas of the country
- To save the society form harmful effects e.g. pollution etc.
- To help and encourage the cultural activities
Business provides employment opportunities not only to the owners by also to other people. Business creates employment opportunities for the following:
- Invertors (owner)
- Industrial workers
- Experts/professional e.g. doctors, professors, engineers, accountants etc.
- Middlemen, traders, agents etc.
- Employees of supporting institution e.g. bankers, Insurers, transport etc.
Another important purpose of business is to use national savings in profitable and useful way. It provides more opportunities of investment to the people to earn profit by investing their surplus money. Following are the methods of investment:
- Owner’s own investment (owner’s equity)
- Investment by purchasing shares and debentures
- Investment in form of Partnership, Musharika or Modarba
Some businesses are started with a view to secure the national interests and to strengthen the economy and defense system of the country. Such types of business are established under the supervision of the government e.g.
- Industry of weapons for defense
- Modern institutions for research like PCSIR etc.
All business activities have their ultimate target of economic development of the country. The optimal use of local and foreign resources is possible only with help of business. A successful and profitable business helps in the economic development of country. Following are
- Economic development
- More national income
- More employment
- Availability of goods
- Favorable Balance of Payment
A business should use new and modern methods or tools for the production of goods. Because, it will not only increase the production and profit but the people also get the benefits of new inventions
Use of Technology
The use of technology is included in the objects and functions of the business. Because, a business can increase the production and profit margin by using latest technology according to the nature of business
A businessman tries his best to make optimum combination of available factors of production. Business activities are performed in such a way that results in the lowest cost of production. Thus, the profit of the business may be maximized.
A sale is an important function or objective of the business, because the expansion in business and increase in profit is impossible without increase in sale. In the words of Drucker, “There is only one valid definition of business purpose, to create customers”
Benefits of Employees
It is also the function of business to provide a variety of benefits and incentives to the employee’s example bonus, over time payment, housing or medical facility and schooling facilities for their children etc.
The social function or object of the business is to provide training facilities to unskilled person. By doing so, the owners or traders provide opportunities or training and thus less trained people get employment in their own or various other organizations.
Better living standards
It is the national duty and object of business to provide better standard of living to the people because the income of people increases with the expansion in business activities. For example, the developed countries are rich on account of stable business activities while the under developed countries are poor due to less business.
Use of Resources
It is the function and object of the business to utilize the available resources like oil, gas and iron etc. for the betterment of the people of country.
Favorable Balance of Payment
The function and object of business is to make balance of payment favorable by increasing exports and decreasing imports, because in this way country makes prominent in the world.
Represented by Seerat Francis