Business Objectives, Stakeholders and the External Environment
Objectives and stakeholders
Business objectives include profit maximisation, survival, growth, market share, customer satisfaction, social responsibility and shareholder value. Objectives differ by ownership: a public corporation may pursue service delivery, a cooperative may pursue member welfare. Objectives can be SMART and may change over the business life cycle.
Stakeholders are individuals or groups affected by or interested in a business: owners, employees, customers, suppliers, lenders, government, local community and pressure groups. Stakeholder objectives often conflict: owners want higher dividends while employees want higher wages; customers want low prices while owners want high margins. Candidates must explain how a business balances these tensions.
The external environment
Use PESTLE (political, economic, social, technological, legal, environmental) or STEEPLE to analyse influences. In Botswana, relevant factors include dependence on diamond revenue, high youth unemployment, water scarcity, the role of the Citizen Entrepreneurial Development Agency, and regional trade through SACU and SADC.
Traps to watch
- Listing stakeholders without explaining how they influence decisions.
- Treating profit as the only objective - many firms pursue survival in a downturn.
- Confusing stakeholders with shareholders; shareholders are one stakeholder group.
- Describing external factors without linking them to a business decision.
Worked example / rule of thumb
A mine facing a water shortage must weigh community needs against production targets. Rule of thumb: for every stakeholder question, state the group, its objective, the conflict it creates, and one resolution - a four-step answer scores higher than a list.