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ACCA Applied Skills · Performance Management · Specific performance analysis issues in not-for-profit organisations and the public sector

Which of the following is most likely to be a primary objective of a government-funded public sector body, as opposed to a profit-seeking company?

A public sector body's primary objective is to provide a required level and quality of service within its allocated funding. Maximising shareholder wealth, earnings per share or dividends are objectives of profit-seeking companies, not government-funded service providers.

  1. AMaximising shareholder wealth
  2. BProviding a specified level and quality of service within the funding allocatedCorrect
  3. CMaximising earnings per share
  4. DMaximising dividends to owners

Explanation

Public sector bodies exist to deliver services to the public within the resources given by government. Shareholder wealth, earnings per share and dividends are objectives of owner-controlled profit-seeking companies.

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