Why does business need multiple objectives? Explain any five such objectives.

Since a business has to balance a number of needs and goals, it requires multiple, objectives. Business is dependent on many people’s satisfaction whose objectives for being involved in it are different and many times conflicting. Owners want profits, employees want good working conditions and remuneration, investors want good return and consumers want good quality product. Therefore, a business needs to have multiple objectives. Some of these objectives are given below: 

Market standing: Business can survive for a longer period only if it is able to capture a big share in the market and has market standing. 

Innovation: It means developing new products and their multiple uses. Old customers can be maintained and new can be attracted by innovation only. 

Improving productivity: Every business enterprise must aim at greater productivity by making optimum use of available resources. 

Earning profit: One of the objectives of business is to earn profits on the capital invested. Every business must earn a reasonable profit to survive and grow. 

Optimum use of physical and financial resources: Every business requires physical (plant, machine, office etc) and financial resources (money or funds) to produce goods and services; the business enterprise must aim to use them efficiently. 

Workers performance and attitude: Every business enterprise must aim at improving its workers performance and creating positive attitudes towards workers. It will boost the morale of the employees. 

Social Responsibility: A business is a part of society and so it must meet the expectations of the society. It can set goals in the areas of the environmental protection, supply of desired quality of products, employment generation etc.

Need for Multiple Objectives: It is generally believed that profit earning is the primary objective of business. However, as per modern thinking, business needs to have several objectives. Consistent and sustainable profit can be earned only if the business performs useful services to society. Business requires multiple objectives since it has to balance a number of needs and goals related to various aspects of society. Following only one objective cannot lead business towards excellence. Objectives are needed in every area where performance and results affect the survival and prosperity of business.

Five of the objectives of business are described below

(i) Profit Maximization Profit is defined as excess of revenue over cost. Profitability refers to profit in relation to capital investment. Although, earning profit cannot be the only objective of business, its importance cannot be ignored. Every business makes an attempt to reap maximum profit as possible in the given market conditions. Profit may be regarded as an essential objective of business for various reasons :

1. It is a source of income for business persons. 

2. It can be a source of finance for meeting expansion requirements of business. 

3. It indicates the efficient working of business. 

4. It can be taken as society’s approval of the utility of business. 

5. It builds up the reputation of a business enterprise.

(ii) Market Standing Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise must aim at standing on stronger footing in terms of offering competitive products to its customers and provide customer satisfaction.

(iii) Innovation Innovation is the introduction of new ideas or methods. There are two kinds of innovation in every business

(a) Product Innovation : In product innovation a new product or service or an improved version of existing product is developed 

(b) Process Innovation: This involves innovation in the methods, skills and activities needed to produce or supply products. Product demand starts declining after a span of time. At this stage, the business must introduce a new innovation to create fresh demand for the existing product by introducing new features in it or bring out a new product to sustain in the market.

(iv) Productivity Productivity is calculated by comparing the value of outputs with the value of inputs. It is used as a measure of efficiency. Higher productivity leads to reduction in costs as the same amount of output is produced with lesser amount of inputs. This ensures survival and growth of the enterprise. 

(v) Social Responsibility Every business operates within a society. It uses the resources of the society and depends on the society for its functioning. This creates an obligation on the part of business to look after the welfare of society. So, all the activities of the business should be such that they will not harm, rather they will protect and contribute to the interests of the society. The activities of business towards the welfare of the society earn goodwill and reputation for the business in the eyes of consumers as well as government.

It is generally believed that profit earning is the primary objective of business. However, as per modem thinking, business needs to have several objectives. Consistent and sustainable profit can be earned only if the business performs useful services to society. Business requires multiple objectives since it has to balance a number of needs and goals related to various aspects of society. Following only one objective cannot lead business towards excellence. Objectives are needed in every area where performance and results affect the survival and prosperity of business.

• Market standing: It refers to the strong foothold of the enterprise among st other competitors. It is very important for a business to have a better market standing by offering full satisfaction to customers.
• Productivity: Every enterprise should aim at a higher productivity by efficiently  using the available resources. It is calculated by the anticipated value of outputs to the inputs required in the production process.
• Efficient use of resources: A business needs both physical as well as financial resources. Physical resources include plans and machinery and financial resources are the funds needed to produce goods and supply them to the customers. 
• Profit: Profit is one of the main objectives of a business. Profit provides support to the business and helps in its growth.
• Management: It is very important for the management to have a positive outlook and they should be efficient in their job. A large portion of the company's operations depend on the attitude of the management.
• Social responsibility: A business cannot be only profit centric. It should have a social responsibility to come forward and help those in need.

The following are the 5 objectives of business 

1. economic objective 

2. social objective 

3. legal objectives

4. sales growth 

5. wealth maximization.