Unit 1 KA3- Objectives

Question 1

What is an objective?

Answer 1

An aim or objective is a statement of what a business is trying to achieve over the next 12 months.

Question 2

Give me examples of aims that private sector businesses can set

Answer 2

Maximise profit
Provide a good quality service
Survive
Operate ethically
Maximise sales
Growth
Corporate social responsibility

Question 3

Give me examples of aims that public sector businesses can set

Answer 3

Provide a service
Work within a budget
Operate ethically
Serve the local community

Question 4

Give me examples of aims that third sector businesses can set

Answer 4

Support a cause
Provide a service
Raise awareness of a cause
Maximise donations
Operate ethically
Survival
Increase number of volunteers

Question 5

Explain corporate social responsibility

Answer 5

Corporate social responsibility (CSR) is when a company aims to act ethically and responsibly to ensure the public perceive them in a positive light.

Examples and benefits of CSR:

Reducing carbon footprint - can improve a company’s reputation as they are seen to be eco-friendly. It may also attract new customers.

Creating new safety measures - can lead to a business gaining quality and safety awards which can then be used as an effective marketing tool and give the company a competitive advantage.

Improving working conditions of employees - will motivate existing staff and attract new staff to the organisation.

Recycling, reducing waste and minimising packaging - can reduce costs for an organisation and improve their reputations

Question 6

Explain managerial objectives

Answer 6

Managers within a business can often have their own objectives which may conflict with or support the main objectives of an organisation.

Working within a budget – managers will be given a set budget to which they have to adhere. This may prevent them from meeting some of the objectives of the organisation.

Increased salary or position – a manager may be aiming to gain a promotion which may help them to meet the main objectives of an organisation. Managers may be aiming to maximise sales to ensure they gain an increase in salary.

Question 7

Explain Saticficing

Answer 7

A company who aims to satisfice will be looking to be just good enough to achieve their other objectives but no more than that. They do not aim to be the best possible but to do the best they can to satisfy stakeholders such as shareholders and customers. This may be due to external pressures such as low economic growth or internal factors such as a lack of finance.

Question 8

Explain growth

Answer 8

Most businesses within the private sector will aim to grow. In order to survive in a competitive market a business must change and develop over time to keep up with market demand. The larger a business becomes, the more opportunities become available for profit and increased economies of scale. Larger companies are at less risk of being taken over by competitors.