Business Objectives
Business: Cambridge International GCSE (2027 Exams), topic 1.3.2
Business Objectives
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
- 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
- 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.
SMART objectives
- SMART stands for:
- S – Specific: The objective must be clear (e.g. increase sales of Product A).
- M – Measurable: The objective must include a number or percentage (e.g. increase sales by 10%).
- A – Agreed: The objective should be discussed and agreed with staff.
- R – Realistic: The objective must be achievable given the resources available.
- T – Time-specific: The objective must include a deadline (e.g. increase sales by 10% within 12 months).
SMART: example
- Instead of saying 'increase sales,' a SMART objective would be:
- 'Increase online sales of trainers by 10% in the next 6 months.'
Test yourself on Business Objectives
Which of these is true?
If profit maximisation is a new biscuit business' aim, which of the following could not be one of their key objectives?