Business objectives are what tourism organisations want to achieve going forward. Without clear objectives and a clear understanding of what the business wants to achieve, the business is more likely to fail or struggle. Very often, businesses produce a mission statement which puts into words what a business is trying to achieve.
Read the extract in the box below, taken from a business management manual, about different types of business objectives.
- Profit Maximisation. The most basic model of a firm assumes firms wish to maximise their profit. They will do this by increasing revenue (increasing price, quantity of goods sold or reducing costs). Higher profits enable a firm to pay higher wages, dividends to shareholders and survive an economic downturn.
- Growth Maximisation. An alternative to profit maximisation is for a firm to try and increase market share and increase the size of the firm. They can do this by cutting price and increasing sales. Growth maximisation may come at the expense of lower profits.
- Social / ethical concerns. An organisation may not be motivated by money but may seek to offer a service to the local community. They may voluntarily take decisions which help the environment / local community. Many big companies now place a key role on promoting their ethical policies.
- Corporate Image. Related to social / ethical concerns is the image / brand of a company. It may wish to project a certain image and brand.
- Stakeholders Well Being. A company may also be concerned about the welfare of its stakeholders – suppliers, workers and customers. For example, giving training and long-term job security to its workers.
- Survival. For many businesses, it seems a matter of surviving – breaking even. In desperate times, firms may be forced to sell off assets to keep their creditors at bay. For many small local businesses struggling in a highly competitive market, survival may be the best they can hope for.