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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.
Profit
objective
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
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Social
services:
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
Employment
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.
Investment
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
National
interests
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.
Economic
development
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
Innovation
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
Optimum
Combination
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.
Sales
Function
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.
Training
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
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