Author: Jim Riley Last updated: Sunday 23 September, 2012
A business may have important non-financial objectives which will limit the achievement of financial objectives. Examples of these are summarised below:
Welfare of employees
The provision of employee welfare is an important objective; this relates to issues such as wages & salaries; comfortable and safe working conditions, training and development; pensions etc. The value of many businesses is critically-dependent on attracting and retaining high quality employees – which makes managing the welfare of such people even more important.
As all marketers understand, a critical activity of business is to understand and meet the needs and wants of customers. In the long-term, this objective is the foundation for a financially successful business. Non-financial objectives under this heading would include meeting defined delivery standards, product quality, reliability and after-sales service levels.
Welfare of management
Management can, and do set objectives which are essentially about their own welfare. These include objectives in relation to pay and conditions.
Relationships with Suppliers
Responsibilities to suppliers are expressed mainly in terms of trading relationships. Large businesses often have considerable buying power over their suppliers – which should be used with care. Supplier objectives would include those relating to the timing of payment and other terms of trade.
Responsibilities to Society
Businesses increasingly aware of their overall responsibility to society at large. The term that is often used is Corporate Social Responsibility. This includes a business complying with relevant laws and regulations (e.g. health and safety), minimising harmful externalities (such as pollution).