Unit 1.5 - business aims and objectives

Question 1

Explain the difference between an aim and an objective.

Answer 1

An aim is a general goal for the business whereas an objective is a specific target that is set to achieve an aim.

Question 2

Name the business aims. (9)

Answer 2

Survival
Profit maximisation
Growth
Market share
Customer satisfaction
Social and community
Ethical
Environmental
Shareholder value

Question 3

What are the purpose of objectives? (5)

Answer 3

Measure performance
Support decision making
Support day to day running
Motivates everyone connected to the business
Informs investors of the direction of the business

Question 4

Identify and explain each of the letters of the acronym SMART.

Answer 4

Specific - objective must be precise
Measurable - an agreed number or percentage
Agreed - all relevant stakeholders agree to the objective
Realistic - must be possible to achieve
Timed - when will the objective need to be reached?

Question 5

What objectives are suitable for existing/established businesses? (6)

Answer 5

Growth
Increase market share
Shareholder value
Ethical
Environmental
Social and community

Question 6

Define stakeholder.

Answer 6

Anyone with an interest in a business.

Question 7

Name the stakeholders. (11)

Answer 7

Shareholder
Owner
Manager
Employee
Supplier
Government
Creditor
Local community
Customer
Competitor
Pressure groups

Question 8

Name the internal stakeholders.

Answer 8

Manager
Employee
Owner

Question 9

What are the objectives of the following stakeholders:
Owner, employee, customer, supplier, government and local community.

Answer 9

Owner - make as much profit as possible
Employee - safe working conditions, promotional opportunities, wages
Customers - quality goods for low prices
Suppliers - increase in orders, sole supplier agreement
Government - increase in tax revenue, increase in employment
Local community - improved infrastructure, job opportunities, acceptable pollution levels/congestion