A business sets aims and objectives to give it direction, but the people connected to it – its stakeholders – often want different, sometimes conflicting, things.
Aims and objectives
An aim is the long-term goal of a business; objectives are the specific, measurable steps taken to reach it. Common objectives include:
- Survival – especially important for a new business or in hard times.
- Profit – the reward for the owner and a source of finance for growth.
- Growth – becoming larger to gain more sales and market share.
- Providing a service – meeting a community need, sometimes ahead of profit.
Objectives are often written as SMART: Specific, Measurable, Achievable, Realistic and Time-bound.
Who are stakeholders?
A stakeholder is any person or group with an interest in how a business performs. They may be internal or external.
- Internal: owners, managers and employees.
- External: customers, suppliers, lenders, the government and the local community.
What each stakeholder wants
| Stakeholder | Main interest |
|---|---|
| Owners | Profit and a return on their investment |
| Employees | Fair pay, job security, good conditions |
| Customers | Quality, fair prices, good service |
| Suppliers | Regular orders and prompt payment |
| Community | Jobs and a clean, safe environment |
Conflicting interests
Stakeholders' wishes often clash, and a decision that pleases one group can upset another.
- If Mariam's café lowers prices to please customers, there may be less profit for the owner or less money for pay rises.
- Paying suppliers faster helps them but reduces the café's own cash.
- Opening late into the night may boost sales but disturb nearby residents in the community.
Good managers cannot satisfy everyone fully, so they listen to stakeholders and try to reach a fair balance between competing interests. Treating workers, customers, suppliers and the community justly is both good ethics and good long-term business, because trust and loyalty keep people returning. A firm that ignores its stakeholders may face strikes, lost custom or a poor reputation, all of which harm profit in the end.