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Business Aims and Objectives >> back to Business Studies

 

 

>>> Useful Supporting Documentation

 

>>> What Are Aims and Objectives- for a summary click here

>>> Thorpe Park Student Pack- click here

 

>>> Sainburys (PLC) objectives- click here

>>> Oxfam (Not for profit / charity) - click here  

>>> Merlin Entertainment (Ltd ) - click here (vision and strategy can be termed as Aims and objectives)

>>> Tesco (PLC)- aims and objectives 

>>> North West Berkshire NHS Trust (Public Sector)- click here

>>> Thames Valley Police (Public Sector)- click here

 

 

>>> What are Business Aims and Objectives?

 

An aim is where the business wants to go in the future, its goals. It is a statement of purpose, e.g. we want to grow the business into Europe.

 

Business objectives are the stated, measurable targets of how to achieve business aims. For instance, we want to achieve sales of €10 million in European markets in 2011.

 

A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.

 

>>> What is SMART?

 

Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims.

The most effective business objectives meet the following criteria:

 

S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business.

M - Measurable – the business can put a value to the objective, e.g. €10,000 in sales in the next half year of trading.

A - Agreed by all those concerned in trying to achieve the objective.

R - Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available.

T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.

 

>>> Business Objectives

 

The main objectives that a business might have are:

 

> Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis.

> Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders.

> Profit satisficing – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.

> Sales growth – where the business tries to make as many sales as possible. This may be because the managers believe that the survival of the business depends on being large. Large businesses can also benefit from economies of scale.

> Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.

 

 

>>> How Business Types Aims and Objectives Differ

   

Not all businesses seek profit or growth. Some organisations have alternative objectives. Examples of other objectives:

 

> Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.

> Public sector corporations are run to not only generate a profit but provide a service to the public. This service will need to meet the needs of the less well off in society or help improve the ability of the economy to function: e.g. cheap and accessible transport service.

> Public sector organisations that monitor or control private sector activities have objectives that are to ensure that the business they are monitoring comply with the laws laid down.

> Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.

> Charities and voluntary organisations – their aims and objectives are led by the beliefs they stand for.

 

 

>> How Businesses Change Their Objectives

 

A business may change its objectives over time due to the following reasons:

 

> A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).

> The competitive environment might change, with the launch of new products from competitors.

> Technology might change product designs, so sales and production targets might need to change.