Business 1 (01) 1.4 Business aims and objectives OCR GCSE Business (1-9) Business 1 (01) 1.4 Business aims and objectives

From the OCR specification The aims and objectives of a business Profit, survival, growth, providing a service, market share How and why objectives may change as businesses evolve Why different businesses may have different objectives

Worksheet

Lesson objectives To be able to identify the aims and objectives of a business To be able to describe how and why objectives may change as the business evolves To be able to discuss why different businesses may have different objectives

Starter Do you have any of these aims? To get a better phone for your birthday To pass your maths GCSE To get a part time job To become a YouTube sensation To get through the year without a detention To learn the guitar Students could share their aims, might be hard work depends on how warmed up the group are for a discussion. I usually start with a picture of a wood burning stove and put in that is my aim.

To be able to identify the aims and objectives of a business

Aims and objectives introduction Aims are the strategic goals of a business; for example to grow Objectives are more specific steps; for example to increase market share by 5% over the next year

Why does a business set aims and objectives? (a) Setting business objectives gives specific targets by which business performance can be measured (b) Setting objectives can be used to motivate workers to achieve (c) Setting objectives clarifies business direction and aids decision making

Students should complete this diagram from their worksheet

Profit Profit is total revenue (money into a business) minus total costs (money out of a business) A business will aim to maximise profit, they must do this therefore in only two ways: Increase revenue into the business Reduce costs out of the business

Survival In its first year of trading a start-up business may aim to just survive When the business is more established the aims may change but if there is a recession or problems in the market then the business may keep this as one of their aims until sales improve

Growth As businesses trade the aims may be to grow the business This may mean; To sell more goods or services To produce more goods To provide more services

Providing a service A service is a task that is performed for money; Hairdresser Gardener Cleaner Insurance Banking A business may aim to provide a new service or improve on an existing service A business that wishes to provide a service for the good of the local community is called a social enterprise

Market share A business may aim to increase their market share. This is the percentage of sales held by a business in a market. They will have to take sales away from competitors to achieve this aim This could be done through; Heavy promotion and discounts To make the products look more appealing

To be able to describe how and why objectives may change as the business evolves

Start-up or established Start-up or established? Choose aims and objectives from this list and place then where you think they should go To increase awareness by customers of the business To increase profits and meet returns on investment To increase market share To achieve market dominance To grow the reputation of the business Survival To be UK market leader To increase customer satisfaction levels To be innovative, introducing new products to the market To reduce the costs of the company by 25% by 2018

To increase awareness by customers of the business To grow the reputation of the business Survival To increase profits and meet returns on investment To increase market share To achieve market dominance To be UK market leader To increase customer satisfaction levels To be innovative, introducing new products to the market To reduce the costs of the company by 25% by 2018

To be able to discuss why different businesses may have different objectives

Different businesses have different objectives The scale of the business will have an impact on objectives Do you think these businesses have the same objectives?

Different businesses have different objectives The size of the business will have an impact on the business – the café on the left is the only one in the Uk the one on the right is part of a very large chain Do you think these businesses have the same objectives?

Different businesses have different objectives The ownership structure will have an impact on the business. Tesco is a plc and the shop on the right is a sole trader Do you think these businesses have the same objectives?

Sample questions Taken from OCR sample papers and the OCR check in tests, all in one place so you don’t have to go rooting round for them :0) You are welcome.

Sample question 1

Answer question 1 (a)Central government does not set business objectives; owners/directors/managers do this. (b) Diversification relates to the range of business activities undertaken, it does not explain the reason for different businesses having different objectives. (c) Correct answer: The objectives of a business change throughout the business’ lifetime. (d) Copyright legislation stops one business copying another’s designs etc., but it does not cover objectives. A business is free to choose objectives as it deems to be appropriate.

Sample question 2 [1]

Answer question 2 (a)Setting business objectives gives specific targets by which business performance can be measured. (b)Setting objectives can be used to motivate workers to achieve. (c)Setting objectives clarifies business direction and aids decision making. (d) Correct answer: Setting objectives may increase management workload, but this is not a benefit to a business. High workloads lead to inefficiency, mistakes, demotivation and stress.

Sample question 3 [1]

Answer question 3 (a) Market share measure the proportion of the market secured by a firm, the number of staff employed is irrelevant. (b) Correct answer: Making products more appealing should increase sales, and hence market share. (c) Reducing output is likely to reduce sales rather than increase market share. (d) Spending less money is likely to increase profit, but has no link with market share.

State and explain one reason why a dentists partnership objectives may have changed after its first year of business

Previous objectives met External influences have changed – increased competition, increasing/decreasing exchange rate, increasing unemployment Internal influences – e.g., death of a partner

Glossary Aim of business; A purpose or intention (general statement) Objective of business; how a business will achieve an aim (steps)

Resources written by Sarah Hilton for revisionstation.co.uk