1. 1 BUSINESS MANAGEMENT 2.5 What is a Successful Business?

2. 2 Main Business Objectives and Measure of Success Profits increasing Demand increasing Achieving organisation’s aims Quality product Profits better than industry average Growth Survival Good relations with customers, workers, etc (stakeholders) Increased donations/volunteers (Charity)

3. 3 Objectives of Private Sector Organisations Type of Organisation Objectives Sole TraderSurvival, profit, make own decisions PartnershipSurvival, profit, share responsibility, growth Private Ltd Company Maximise sales/profits, bigger share of market Public Ltd Company maximise sales/profits, grow, keep shareholders, customers and staff happy

4. 4 Objectives of Public Sector Organisations Type of Organisation Objectives Public Corporations eg BBC Provide a service Cut costs Raise revenue Local AuthoritiesProvide a service Use money wisely Make wise decisions

5. 5 Objectives of Voluntary Sector Organisations Achieve their aims Cover costs Increase donations Raise awareness Provide a benefit to the community

6. 6 What are STAKEHOLDERS? STAKEHOLDERS are people with any interest in or an influence on an organisation. They may be: People with no financial interest eg environmental groups People with a financial interest eg shareholders or employees See Unit 1.2 for more information about Stakeholders

7. 7 Stakeholders can be … getting paid for supplying goods the reputation of the business for paying on time SUPPLIERS ensuring that the business performs well and increases the value of their investment – protecting their investment SHAREHOLDERS the activity of the business – the business pays their wages EMPLOYEES the activities of the business to make sure that tax rules are applied INLAND REVENUE running the business MANAGERS

8. 8 Stakeholders – Interest and Influence Can change amount of tax due Makes sure tax laws are followed Inland Revenue Can work hard or not. Can take action or leave Want job security, good pay and conditions Employees Make the main decisions Successful business Healthy profits Directors Can buy or not buy Can complain Want good service/quality goods reasonable prices Customer InfluenceInterestStakeholder

9. 9 Stakeholders – Interest and Influence Can alter interest rates Can lend or not lend Want to be repaid loansBanks Can decide not to supply. Can change prices Want repeat orders Want to be paid on time Suppliers Can vote at AGM Can buy or sell shares Want to receive good dividends. Shareholders Make decisions affecting how well business performs Want job security, good salary and promotion Managers InfluenceInterestStakeholder

10. 10 Conflict between Stakeholders Some examples of conflict Bank wanting the business to keep within credit limits Conflicts with Supplier want to be paid on time Employees then worried about their job security Conflicts with Directors want to cut costs by getting rid of staff

11. 11 Some examples of conflict Owners want to make profit customers want low prices Community wants less noise managers don’t want to spend money on sound proofing Shareholders want high dividends board of directors want to be spend money on R&D Suppliers want paid quickly owner wants to pay later Managers want to cut costs workers want overtime Bank wants income from business loans customers want low interest rates