1.2.5
Business Objectives
The Role of Objectives in Running a Business
The Role of Objectives in Running a Business
Objectives set targets for particular aims that a company wants to achieve. Objectives are more specific than aims. Once the management of a business have set its overriding purpose or aim, they must then define the business objectives.


Objective to profit maximise
Objective to profit maximise
- E.g. if profit maximisation is the business' aim, then an objective might be to earn over £10,000 in revenue or keep overall costs to a maximum of £8,000.


Objectives are measurable targets
Objectives are measurable targets
- Specific business objectives help firms to achieve their aim as they include measurable targets for the firm to work towards.
- Targets allow a business to see which areas (e.g. growth, sales, profits) need to be improved.
- Having targets for objectives can help a business to improve continuously.
Different Businesses Have Different Objectives
Different Businesses Have Different Objectives
There are 3 key factors that influence a business’ objectives:


The size of a business
The size of a business
- New companies, like a Brexit consultancy set up in 2016, might focus on growth and survival because of the need to establish themselves and their high chance of failure.
- This might mean they need to focus more on short-term objectives.
- Smaller companies like Revolut or Monzo (banking apps) rely much more on word of mouth. Customer satisfaction may be a key objective.
- Larger businesses, or companies (like Tesco plc) face more scrutiny from the public. In 2019, Tesco employed around 300,000 people.


The level of competition
The level of competition
- If a business is operating in a highly competitive market, then their objectives may change from increasing market share or growth to survival.
- Survival is important when there is a lot of competition as it represents the likelihood of a business to survive when faced with high competition.
- A price war between rivals drove out supermarket Kwik Save from the supermarket industry in the 2007.


Type of business
Type of business
- Not-for-profit businesses will usually focus more on the social and ethical objectives than for-profit firms.
- For example, TOMS shoes donates a pair of shoes to children in Africa for every pair of shoes that you buy.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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