Home > Topics > Business Organisation and Management > Objectives & Functions of Business

Objectives & Functions of Business

Every business exists for a purpose. Let's explore what drives businesses beyond just making money.

Primary Objectives of Business

1. Economic Objectives

a) Earning Profit

  • Why: Survival & growth
  • Example: Reliance earned ₹60,000 crore profit (FY 2023) → Reinvested in Jio & Retail

b) Creating Customers

  • Peter Drucker's wisdom: "The purpose of business is to create and keep a customer"
  • Example: Amazon Prime → Created loyal customer base

c) Innovation

  • Stay relevant in changing markets
  • Example: Netflix shifted from DVD rental → Streaming → Original content

2. Social Objectives

a) Employment Generation

  • Example: TCS employs 6 lakh+ people in India

b) Quality Products at Fair Prices

  • Consumer protection
  • Example: Patanjali's affordable ayurvedic products

c) Environmental Protection

  • Sustainable business
  • Example: ITC's green buildings, water-positive operations

d) Social Welfare

  • CSR activities (mandatory for large companies)
  • Example: Tata's hospitals, schools, community development

3. Individual/Personal Objectives

a) Fair Wages & Job Security

  • Employee satisfaction
  • Example: Google India's competitive salaries & perks

b) Safe Working Conditions

  • Example: Maruti Suzuki's safety protocols in factories

c) Career Growth Opportunities

  • Example: Infosys's training programs for freshers

Functions of Business

1. Production/Manufacturing

Convert raw materials into finished goods

  • Example: Amul collects milk → Processes → Produces butter, cheese, ice cream

2. Marketing

Identify needs & satisfy them profitably

  • Market research
  • Product development
  • Pricing, promotion, distribution
  • Example: Myntra's personalized fashion recommendations

3. Finance

Arranging & managing funds

  • Capital procurement
  • Investment decisions
  • Working capital management
  • Example: HDFC Bank provides loans to businesses

4. Human Resources

Managing people

  • Recruitment & training
  • Performance evaluation
  • Employee welfare
  • Example: Wipro's HR policies for work-life balance

5. Research & Development (R&D)

Innovation for competitive advantage

  • Example: Mahindra's electric vehicle research

6. Accounting

Recording & reporting financial transactions

  • Bookkeeping, auditing, tax compliance
  • Example: Every company maintains accounts as per Companies Act

Balancing Objectives: The Three-Way Approach

ECONOMIC OBJECTIVES
(Profit, Growth)
        ↕
SOCIAL OBJECTIVES ←→ INDIVIDUAL OBJECTIVES
(Society welfare)     (Employee welfare)

Best Example: Tata Group

  • Economic: Market leader in multiple sectors
  • Social: Built Jamshedpur city, runs cancer hospitals
  • Individual: Employee-friendly policies, fair wages

Quiz

Test Your Knowledge

Question 1 of 4

1. Primary objective of business is:

Social service
Earning profit
Employment only
Government compliance

💡 Final Wisdom: "A successful business is like a healthy tree – roots in profit (survival), trunk in society (support), and branches in employee welfare (growth). Remove any one, the tree falls!"

← PreviousNext →