9609 · 1.4.1
Business objectives in the private sector and public sector flashcards
Revision flashcards for Cambridge 9609 Business objectives in the private sector and public sector (syllabus 1.4.1). Flip, recall, then mark a real past-paper question.
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Profit maximisation?
Primary aim for many private firms — maximise difference between revenue and cost.
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Growth objective?
Increase size — market share, revenue, geographic spread.
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Survival objective?
Cover costs and stay trading — common in recession or start-up.
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CSR objective?
Social and environmental responsibilities beyond legal minimum.
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Public sector aim?
Provide services — health, education, transport — not profit-max.
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Public sector finance?
Tax funding, subsidies, regulated user charges.
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Objective conflict?
CSR costs may reduce short-run profit (1.4.2).
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Link to 1.5?
Different stakeholders prefer different objectives.
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What is meant by 'profit maximisation'?
A primary objective of most private sector businesses, aiming to make the largest possible positive difference between total revenue and total costs. This provides the greatest return for the owners/shareholders.
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Define the business objective of 'growth'.
An objective to increase the size of the business. It can be measured in several ways, including by sales turnover, market share, number of employees, or number of outlets.
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Explain 'survival' as a business objective.
A short-term objective focused on ensuring the business can continue to operate, covering its costs. It is the most important objective for new businesses or those facing a crisis, such as a recession.
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What is Corporate Social Responsibility (CSR)?
A business objective to operate in an ethical and sustainable manner, taking into account the interests of all stakeholders (e.g., employees, community, environment), not just shareholders.
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What is the primary objective of a public sector organisation?
To provide essential services to the public to a required standard of quality and accessibility. This is done while operating efficiently within a government-allocated budget to achieve 'value for money'.