Business Objectives

Question 1

Why do businesses exist?

Answer 1

• to provide a good or service to a customer
• if the business meets the needs of a customer it should succeed
• formed by an entrepreneur willing to take risk
• objectives are set to minimise risk and satisfy customer needs

Question 2

What are objectives?

Answer 2

A goal that the business wishes to achieve
- can be divided into corporate or functional objectives

Corporate objectives - are the goals of the entire business
Functional objectives - relate to specific sections of the business

Question 3

What are corporate objectives?

Answer 3

• the ultimate aims of the business
• the reason that they operate
• usually seen as a business’ mission statement

Question 4

What is a mission statement?

Answer 4

• a mission is a purpose or an intention

- business’ create mission statements to show what the business intends to do

Question 5

How do businesses set objectives?

Answer 5

• once a mission is set, objectives are created to help complete it
• objectives then allow a business to measure how successful it is
• must make sure objectives are SMART

Question 6

What is SMART

Answer 6

• Specific. Measurable. Achievable. Realistic. Time Related
• makes it clear what to everyone involved in a business, in what they wish to achieve
• allows the business to create a strategy to achieve this objective

Question 7

What are some possible business objectives?

Answer 7

• improve cash flow position
• maximise profits
• social and ethical objectives
• growth/expansion
• improve reputation
• survival
• stakeholders needs
• diversification