What is a business Write down what you think the word business means. Then look it up and jot down 2-3 other definitions. To be “in business” means an individual or group of people have agreed a common goal and are actively working towards achieving this goal by supplying products or services to customers. This will be the definition of business used throughout the course. Have handbooks and assignment brief printed to hand out

All Businesses have, Business aims and Objectives

What do we mean by Aims & Objectives? Business activity is focused around the achievement of business aims and business objectives. A business aim is the goal a business wants to achieve. A primary aim for all business organisations is to add value and in the private sector this involves making a profit. More strategic aims include expansion, market leadership and brand building. A business objective is a detailed picture of a step you plan to take in order to achieve a stated aim. These need to be SMART in order for the business to know what progress it has made towards achieving the objective: Specific - clear and easy to understand. Measurable - i.e. able to be quantified. Achievable - possible to be attained. Realistic - not 'pie in the sky'. Time bound - associated with a specific time period.

Corporate aims The corporate aims of a business are its overall purpose. This is what the business is trying to achieve in the long term. Different types of business will have different aims. Lets have a look at Tesco http://www.tesco.com/investorInformation/report97/review/page1.html

Survival All business will consider survival Early stages of trading When trading becomes difficult (during a recession) Threat of takeover

Profit It is often argued that the main objectives of private sector business is to make profit In practice a business is more likely to have a satisfactory level of profit as an objective. This is know as SATISFYING

Growth Many businesses pursue growth as their main objective It is argued that firms must grow in order to survive Failure could result in a number of factors. Can you think what these might be?

Increasing shareholder value Many public limited companies aim to increase shareholder value Legislation requires companies to publish a measure of shareholder value in their annual reports. Lets have a look and examine Tesco annual report. http://www.tescoplc.com/files/reports/ar2012/index.asp

Managerial objectives Common examples Maximise personal salary Maximise their departmental budget Improve their status and recognition Maximise the number of employees in their charge Maximise their leisure time Delegate as much work as possible Maximise fringe benefits Abuse of power

Sales revenue maximisation Where a business try to gain the highest possible sales revenue. This objective will be favoured by those employees whose salaries are linked to sales.

Image, reputation & social responsibilities Business have started to appreciate how important image is. Why has this happened? Legislation has been passed which favours customers There have been changes in social attitudes Competitive pressure forced on business to take into account the needs of others

Image, reputation & social responsibilities To customers Employees Suppliers Discus the above and feedback on why you think this is important

Behavioural theories Assume that business objectives are not determined by owners and managers alone. Stakeholders, such as the government, customers and pressure groups, may affect the firms objectives. Can you find 2 examples of this happening?

Business operations Business sometimes set objectives for the operation of the organisation For example they may decide They need to diversify-What does this mean? To change focus-What does this mean? Can you give 2 examples of different business that have done this?

Objectives in the public sector This is a result of government policy in the last two decades Historically, the main objectives of public sector business was to supply a public service. British gas, British rail, NHS Name 2 public sector organisations and find out what their objectives are

What determines business objective Size & status of the business The power of the share holders Ownership Long and short term objectives External & internal pressure Risk Corporate business culture

Mission Statements Businesses are increasingly producing mission statements. These include descriptions of he overall aims of the business, they tend to be aimed at the stakeholders in the business.

Lets look at Tesco’s Tesco’s mission statement: “Our vision is for Tesco to be most highly valued by the customers we serve, the communities in which we operate, our loyal and committed staff and our shareholders; to be a growth company; a modern and innovative company and winning locally, applying our skills globally.” Tesco’s mission statement is aimed at motivating the staff and giving a simplified objective about what they aim to achieve. From the mission statement Tesco want to earn respect from its customers by providing a good service, and being loyal to its staff and customers. Also they state that as a company they wish to grow and modernise and start open up into new markets

You will need to use your research skills Activity Using the internet find out the aims and objectives for Tesco- Using your work books write out the aims and objectives for Tesco making sure you have written them in detail. For example: One of their objectives is to grow the UK core-what does this mean? You will need to use your research skills

To grow the UK core Tesco’s goal ‘to grow the UK core’ is according to their website, as relevant today as it was in 1997. The UK is the largest business in the Group and a key driver of sales and profit. This year, Tesco are making a £1 billion commitment to improve the shopping trip, driving a strong pace of improvement in the things that matter for customers which will involve significant revenue and capital investment. These changes will reinvigorate the shopping trip for customers, and consequently deliver improved performance for shareholders.

Home work Activity In your text books define the following terms giving an example for each A business Products Service Aim of a business Objectives SMART Growth Survival Increasing your market share Increasing share holder value Diversify Maximise profit expansion