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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 analyzed the reasons of less revenue. After analysis, the company decided
(i) to reduce the labour cost by shifting the manufacturing unit to a backward area where labour was available at a very low rate.
(ii) to start manufacturing solar water-heaters and reduce the production of electric waterheaters slowly.
This will not only help in covering the risks, but also help in meeting other objectives too.
(i) to reduce the labour cost by shifting the manufacturing unit to a backward area where labour was available at a very low rate.
(ii) to start manufacturing solar water-heaters and reduce the production of electric waterheaters slowly.
This will not only help in covering the risks, but also help in meeting other objectives too.
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Question : 21
Total: 37
Identify and explain the objectives of management discussed above.
Solution:
The objective of the management that is being discussed here is 'organisational objective'. The total revenue earned by an organisation should be such that it is able to cover atleast various costs and expenses. That is, the revenue earned should be such that the organisation is able to continue operations in the long run. In addition, it should be able to focus on growth in terms of sales, production, etc.
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