1.3 Setting Business Aims and Objectives

Question 1

What is meant by the term “aim”?

Answer 1

A long term general goal for a business.

Question 2

What is meant by the term “objective”?

Answer 2

A short term specific target that is set for a business to achieve an aim.

Question 3

What is meant by the term “sales”?

Answer 3

Refers to the number of products sold by a business.

Question 4

What are the reasons for setting a business objective?

Answer 4

• to guide decision-makers.
• to provide a measurable target.
• assist in raising finance.
• co-ordination.

Question 5

What are examples of business aims?

Answer 5

• survival.
• growth.
• profit maximisation.

Question 6

What are examples of business objectives?

Answer 6

• market share.
• customer satisfaction.
• shareholder value.
• social and ethical targets.

Question 7

What is meant by the term “customer satisfaction”?

Answer 7

Measures whether the products supplied by a business match or exceed the expectations of customers.

Question 8

What is meant by the term “dividends”?

Answer 8

The financial rewards paid out to shareholders each year.