Maximising Profit

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As result of uncertainty the important business objective might be to survive in the initial stages of trading. During a recession a business could face falling demand, bad debts and low confidence. Firms sometime become target for other firm to take over. When this happens the survival of the firm in its existing form may be the main objective. One way to do this is to persuade the owner not to sell share to the person or company bidding for them. In the long run it is unlikely that survival would remain the only objective. Maximising Profit:

One of the primary aims of a private sector business is o maximise their profit. This is achieved where the difference between the total revenue earned by the business for the selling of its products and the total cost of producing those products is at its greatest. Firms aim fir as much profit as possible. In practise a business is more likely to have satisfactory level of profit as an objective. Objectives of small firms: owner of small firms may not want to expand their output to a point where their profits are maximised. This may be because: The owners of the companies might have mixed feelings about growth.

Growth often means current profiles have to be invested to fund that expansion. Sales Revenue Maximisation: Sales Revenue Maximisation was put forward by William Baumol in the 1950’s. The objective of firms may be to gain the highest possible sales revenue. Those employees whose salaries are linked to sales will favour this objective. Managers and sales staffs are examples of staff paid according to the sales revenue that they generate. Sales revenue maximisation is not the same as profit maximisation. Image and Social Responsibility: In recent years firms began to realise how important their image is.

Many have also seen the benefit of showing responsibility to the people involved in business activity, such as customers, employees, and suppliers. This has happened because legislation has been passed which favours consumers, changes have occurred in social attitudes, and competitive pressure has forced businesses to take into account the needs of others. What determines Business Objectives: Behavioural theories suggest that the group, which dominates the business, will determine the objectives. If the owners are in control they are likely to aim for profit.

However there are other factors the influence the choice of the objective. Technological Culture – Emphasis and focus is on the development of technological excellence. Ideas and suggestion form all levels in the firm are positively encouraged. The main culture present in Simons is the Task Culture. The business has to be flexible due to weather and supplier set backs. This is the ideal culture for Simons and suits the running of the company due to the structure and type of business they are involved in. Organisational Functions: All organisations must carry out and run by a number of separate functions.

These functions put together constitute the business system of the organisation. In most businesses there are six organisational functions, and they are closely related. 1) Production – The function of production is to use material to manufacture goals, or to supply a service. If production fails, the whole organisation will fail. 2) Finance – All business must control their expenditure. To achieve this, the Finance department must record all transactions produce all financial documents and reports and deal with incoming and out going payments.

3) Marketing – The function of marketing is to identify and anticipate customer needs. This is done through a variety of activities, including market research, advertising, promotion, packaging pricing and distribution. 4) Research and Development – The R;D function is usually found only in large organisations whish try to maintain or increase their market share by introducing new products or by changing and improving existing ones. Simons Construction have a small R;D department that cannot be used to a large extent.

5) Human Resources – This function of a business is concerned with the labour factor. It deals with all aspects of recruitment, selection and training of staff, employee appraisal, and any disputes, complaints or grievances that might arise. 6) Administration – Its departmental function is to communicate with the workforce, produce all necessary documentation, keep all records apart from financial ones, and deal with all enquires. All business organizations exist either to manufacture goods or to provide a service in order to make a profit.

All business activity require the use of factors of production, And all Businesses must ensure that they have the requisite factors of production, and that these are used effectively. This requires the organization to ensure that all its parts carry out their functions. All organizations must carry out a number of separate functions. These functions put together constitute the business system of the organization. In most businesses there are 6 organizational functions and they are closely related. Production The function of production is to use materials to manufacture goals, or to supply a service.

If production fails, the organization as a whole will fail. No business can survive if it does not produce enough goods or services to satisfy the customers needs. One part of Simon’s construction within the production sector is Wrights construction. Based in Lincoln since 1830’s, Wrights Construction (Lincoln) LTD operates in Lincolnshire, Nottinghamshire and the east Midlands area for a wide range of clients. Wrights have a long track record of delivering high quality traditional buildings, particularly in the public sector.

High levels of directly employed, skilled labour force ensure maintenance of quality standards. Wrights operates as an autonomous member of the Simons group, but with direct access to the groups’ extensive resources. Finance department All businesses must control their expenditure. To achieve this, the finance department must record all transactions produce all financial documents, reports and deal with outgoing and incoming payments. With Simons Construction, the finance sector overview the finance areas. Shown below is a table of the turnover of the business.

Marketing department The function of marketing is to identify and anticipate customer needs. This is done through a variety of activities, including market research, advertising, promotion, packaging, pricing and distribution. Research and development department The Research and development function is usually found only in large organization which try to maintain or increase their market share by introducing new products or by changing and improving existing ones. Simons Estates specialize in providing investors and tenants with solutions for the property development market.

Their key objective is to meet their customer needs and constantly research with them how improve the processes and end products. The estates team has an outstanding balance of skill, experience and energy. Combining this with the wide resources of the Simons Group, they are able to provide clients with a complete package from sourcing the land, through design and construction, to hand over to the end user. Working principally for property development investors, Simons estates identify opportunities and develop solutions to build these into successful investments.

They excel at matching the disparate elements necessary in order to provide a successful whole and the team’s track record allows clients to choose them with total confidence. Simon’s estates have a reputation for reliability, quality, tailor made customer service and a high standard end product. Whatever they are providing; whether it be a supermarket, a distribution center or a factory; they have to be efficient, and the large amount of repeat business secured is testament to the quality that is provided.

Human Resources This function of a business is concerned with the labour factor. It deals with all aspects of recruitment, selection and training of the workforce. It is also responsible for health and safety legislation at work, and for looking after the welfare of the employees. Another aspect of this function is dealing with training of staff, employee appraisal, and any disputes, complaints of grievances that might arise.

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