Setting Business Aims And Objectives
Overview
Ask two shop owners on the same street what they are trying to do and you can get answers that sound identical and mean completely different things. One says she wants the business to do well. The other says she wants to be selling from three shops by the end of next year, each taking at least 40,000 a month. Only the second of those two women can tell, on any given morning, whether she is winning.
That is the whole of this topic. In this lesson you will separate an aim from an objective and learn the objectives the specification actually names, from survival to shareholder value. You will see why the objectives a business sets depend on its size, its competition and what kind of organisation it is, and why they change as it grows. You will look at what the public sector is trying to achieve instead of profit, at the many ways success can be measured when profit is not the point, at why governments spend public money encouraging people to start businesses at all, and finally at the reasons so many new businesses do not survive their first few years.
Objectives
- What are business aims and objectives?
- Purpose of setting objectives.
- Role of objectives in running a business.
- Changing objectives.
- Public sector objectives.
- Use of objectives in judging success.
- Governments’ role in promoting enterprise.
- Reasons why new businesses can fail.
Mind map
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Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Setting Business Aims And Objectives. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- Which one of the following is the most likely objective for a business in its first year of trading? A. Increasing shareholder value B. International expansion C. Profit maximisation D. Survival Answer: D
- Which one of the following might cause a new business to fail? A. Good business management B. Keeping accurate records of cash C. Running out of cash before customers pay D. Setting clear objectives Answer: C
- A business sells 6 million litres of juice in a market where total sales are 40 million litres. What is its market share? A. 6.7% B. 15% C. 24% D. 66.7% Answer: B
- Which one of the following is most likely to be an objective of a public sector organisation? A. Increasing the share price B. Maximising profit for shareholders C. Paying a dividend to owners D. Providing a service to everyone who needs it Answer: D
- Which one of the following best explains the difference between an aim and an objective? A. An aim is set by employees and an objective by the owner B. An aim is a general long-term goal and an objective is a specific measurable target C. An aim applies to the public sector and an objective to the private sector D. An aim must be financial and an objective must not be Answer: B
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