Business Objectives Change Over Time
Business: Edexcel IGCSE, topic 1.1.3
Business Objectives Change Over Time
As a business evolves and grows, its aim and objectives are likely to change.
Stage of business life
- The key aim and objective for new businesses may be survival and growth.
- However, as it grows and becomes more financially stable, the key aim may change to maximising long term profits and its objective may change to expanding into new countries in order to do so.
- In the same way that the environment a business faces is constantly changing, the objectives must change with it.
New legislation
- New laws may be introduced that affect the way a business has to operate.
- A change in the minimum wage would affect a business’ cost objectives. A change in the minimum wage is likely to affect supermarkets, like Tesco plc, more than other businesses because they have lots of low paid employees.
Changes in the economy
- A recession is likely to have a negative effect on a company’s growth, profit and sales.
- A company’s objectives relating to sales or revenue may need to change to be more realistic in a time when it is harder to sell goods and services.
Changes in society
- In recent years, society has placed a greater importance on the environment and how business practices can have a negative effect on the environment.
- This has meant businesses need to adjust their environmental objectives accordingly.
- Iceland promising to remove plastic packaging from its products by 2023 is a sign of this.
Changes in technology
- New technology can affect a business’ operations or eventually the business’ product itself.
- A business may need to invest to build a new product and so getting the latest technology may become an objective itself.
- Amazon bought Kiva Robotics so that it could use robots (automation) in more of its factories and fulfillment centres (distribution warehouses).
Test yourself on Business Objectives Change Over Time
Amazon bought Kiva robotics so it could use robots in more of its factories. This is an example of a change in...
Which of these are true about business life cycles?
What factors may impact how a business evolves?