Question

Mega Ltd. was manufacturing water-heaters. In the first year of its operations, the revenue earned by the company was just sufficient to meet its costs. To increase the revenue, the company analysed the reasons of less revenues. After analysis, the company decided

1) to reduce the labour cost by shifting the manufacturing unit to a backward area where
labour was available at a very low rate.

2) to start manufacturing solar water-heaters and reduce the production of electric
water-heaters slowly.

This will not only help in covering the risks but also help in meeting other objectives too.

a) Identify and explain the objectives of management discussed above.

b) State any two values which the company wanted to communicate to the society.

Answer 1

a) The objective of the management referred in the paragraph is 'organisational objective'. One of the important organisational objectives is to survive and exist in a competitive market for a long period. This becomes feasible only if the total income earned by an organisation should be able to cover the various costs incurred in its operation. Also, it must grow and expand their activities.

b) Two values conveyed by the organisation in this situation:

1. Providing employment in backward areas of society
2. Using environment-friendly methods of production