1.3 Setting Business Aims And Objectives

Question 1

What is an aim

Answer 1

The general goal of the business

Question 2

What is an objective

Answer 2

a specific target that is set for a business to achieve

Question 3

What is the purpose of setting business objectives

Answer 3

• Helps with decision making
• Helps investors see where the business is heading
• Helps track progress so changes can be made if necessary
• It can motivate everyone as they know what they are trying to do

Question 4

What are some examples of business aims and objectives

Answer 4

Survival - requires the business to continue trading

Profit maximisation - achieve the largest possible surplus of revenues over expenditures
Growth (domestic and international)

Market share - The sales of one product as a percentage of the total market sales

Customer satisfaction - the extent which customers are pleased with the products they have bought and whether they would make repeat purchases

Being ethical - setting targets to help ensure its decisions are morally correct

Question 5

What is a SMART objective

Answer 5

Specific
Measurable
Achievable
Realistic/Relevant
Timed

Question 6

What is a private sector organisation

Answer 6

owned by individuals

Question 7

What is a public sector organisation

Answer 7

owned by the government

Question 8

Why do roles and objectives differ in businesses?

Answer 8

• that businesses operate in different sectors
• business operations vary in size and scale
• some businesses are for profit and some are for the people(not-for-profit organisation)

Question 9

What is a not for profit organisation?

Answer 9

A business that aims to do something other than to make profit for the owners, such as providing a public service or helping people

Question 10

If a business is in a market that is growing what would their objectives be?

Answer 10

Over time its aims and objectives may change to focus on growth. An example of this would be a company focused on sustainable products, such as biodegradable packaging, where demand is growing.

Question 11

If a business is in a market that is increasing in competition what would their objectives be?

Answer 11

Its aims and objectives may have to change to focus on survival, which is when a business aims to keep its day-to-day operations running.

Question 12

Objectives set by an established business

Answer 12

becoming the dominant business in the market,
international expansion,
increasing shareholder value
ethical and environmental considerations

Question 13

Objectives set by a start up business

Answer 13

Survival
Profit

Question 14

What are over ways of understandings a businesses success excluding profit(financial metrics)

Answer 14

Non financial metrics including:

• Customer satisfaction
• Number of customers
• Employee satisfaction