1.1.2

Business Objectives

Test yourself on Business Objectives

Test your knowledge with free interactive questions on Seneca — used by over 10 million students.

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 has set its overriding purpose or aim, they must then define the business objectives.

Objective to maximise profit

Objective to maximise profit

  • 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 Companies Have Different Objectives

There are 3 key factors that influence a firm’s 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.
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.
Jump to other topics
1

Business Activity & Influences on Business

1.1

Business Objectives

1.1.1Business Aims1.1.2Business Objectives1.1.3Business Objectives Change Over Time1.1.4End of Topic Test - Business Aims1.1.5Diagnostic Misconceptions - Profit
1.2

Types of Organisations

1.2.1Sole Traders & Partnerships1.2.2Limited Companies1.2.3Limited Liability1.2.4Unlimited vs Limited Liability1.2.5Not For Profit & Franchises1.2.6Multinational Companies1.2.7End of Topic Test - Business Ownership1.2.8Application Questions - Business Ownership1.2.9Diagnostic Misconceptions - Company vs Business1.2.10Diagnostic Misconceptions - Owners vs Shareholders
1.3

Classification of Businesses

1.3.1Sectors
1.4

Decisions on Location

1.4.1Location
1.5

Business & the International Economy

1.5.1Globalisation1.5.2Exchange Rates
1.6

Government Objectives & Policy

1.6.1Government Objectives1.6.2The Government & Business Activity1.6.3Interest Rates1.6.4Interest Rates - Calculations1.6.5Diagnostic Misconceptions - Recessions
1.7

External Factors

1.7.1External Factors
1.8

What Makes a Business Successful?

1.8.1Measuring Success1.8.2Reasons for Failure
2

People in Business

2.1

Internal & External Communication

2.1.1Communication
2.2

Recruitment & Selection Process

2.2.1Types of Employment2.2.2Recruitment Stages2.2.3Effective Recruitment2.2.4Legal Controls Over Employment2.2.5Diagnostic Misconceptions - Internal Recruitment
2.3

Training

2.3.1Training
2.4

Motivation & Rewards

2.4.1Motivation in the Workplace2.4.2Financial & Non-Financial Methods2.4.3End of Topic Test - The Workforce2.4.4Application Questions - The Workforce2.4.5Diagnostic Misconceptions - Money
2.5

Organisation Structures

2.5.1Organisational Structures2.5.2Centralised vs. Decentralised Structures2.5.3Tall & Flat Organisations2.5.4Functional Areas Within a Business2.5.5End of Topic Test - Org Structure
3

Business Finance

3.1

Sources of Finance

3.1.1Internal & External Sources of Finance3.1.2Factors Affecting Sources of Finance
3.2

Cash Flow Forecasting

3.2.1Cash Flow3.2.2Consequences of Cash Flow Problems3.2.3Cash Flow - Calculations3.2.4Solutions to Cash Flow Problems3.2.5Diagnostic Misconceptions - Cash Flow
3.3

Cost & Break-Even Analysis

3.3.1Costs, Revenue & Profit3.3.2Profit, Average Unit Cost & Interest3.3.3Costs - Calculations3.3.4Revenue - Calculations3.3.5Break-Even Analysis3.3.6Profit & Losses - Calculations3.3.7End of Topic Test - Finance3.3.8Grade 9 - Finance3.3.9Diagnostic Misconceptions - Fixed Costs3.3.10Diagnostic Misconceptions - Break-even
3.4

Financial Documents

3.4.1Financial Statements3.4.2Income Statement3.4.3Understanding Business Performance
3.5

Account Analysis

3.5.1Business Calculations3.5.2Gross Profit - Calculations3.5.3Net Profit - Calculations3.5.4Business Calculations 23.5.5Business Calculations 33.5.6Liquidity
4

Marketing

4.1

Market Research

4.1.1Market Research4.1.2Forms of Market Research
4.2

The Market

4.2.1Customer Needs4.2.2Satisfying Customer Needs4.2.3Market4.2.4The Competitive Environment4.2.5Market Segmentation4.2.6Market Mapping - Price vs Quality4.2.7End of Topic Test - Marketing4.2.8Application Questions - Marketing4.2.9Diagnostic Misconceptions - Competition
4.3

The Marketing Mix

4.3.1Price4.3.2Price Penetration4.3.3Other Forms of Pricing4.3.4Product Design4.3.5The Product Life Cycle4.3.6Extending Existing Products4.3.7New Products4.3.8Benefits and Risks of New Products4.3.9Promotion4.3.10Public Relations and Sales Promotion4.3.11Sponsorship & Social Media4.3.12Product Placements4.3.13Promotional Mix4.3.14Place4.3.15Place 24.3.16Place 34.3.17M-Commerce4.3.18Benefits & Drawbacks of M-Commerce4.3.19End of Topic Test - Marketing Mix4.3.20Grade 9 - Marketing Mix4.3.21Diagnostic Misconceptions - Decreasing Price4.3.22Diagnostic Misconceptions - Advertise vs Promote4.3.23Diagnostic Misconceptions - Social Media
5

Business Operations

5.1

Economies & Diseconomies of Scale

5.1.1Economies of Scale5.1.2Diagnostic Misconceptions - Economies of Scale
5.2

Production

5.2.1Production Processes5.2.2Flow and Batch Production5.2.3Production Efficiency5.2.4Technology & Production5.2.5Diagnostic Misconceptions - JIT vs JIC
5.3

Factors of Production

5.3.1Factors of Production
5.4

Quality

5.4.1Importance of Quality5.4.2Identifying Quality5.4.3Total Quality Management5.4.4End of Topic Test - Operational Decisions

Practice questions on Business Objectives

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    Which of these is true?Multiple choice
  2. 2
    If profit maximisation is a new biscuit business' aim, which of the following could not be one of their key objectives?Multiple choice
  3. 3
    Features of business objectives:True / false
  4. 4
    Smaller companies like Revolut or Monzo (banking apps) rely heavily on word of mouth. Which is most likely a key objective for them?Multiple choice
  5. 5
    Which objectives do not-for-profit businesses usually focus more on compared to for-profit firms?Multiple choice
Answer all questions on Business Objectives

Unlock your full potential with Seneca Premium

  • Unlimited access to 10,000+ open-ended exam questions

  • Mini-mock exams based on your study history

  • Unlock 800+ premium courses & e-books

Get started with Seneca Premium

Business Aims

Business Objectives Change Over Time