1. Business and Communication Systems BUSINESS AIMS GCSE Business and Communication Systems

2. Business and Communication Systems Learning Intentions Demonstrate knowledge and understanding of the aims of business Discuss how these aims may be in conflict

3. Business and Communication Systems Business Aims The main business aims are: Survival Profit Maximisation Growth Corporate Image/Public service Concern for the Environment/Social Responsibility

4. Business and Communication Systems Why are Aims Helpful Give direction and a common purpose for management and staff Useful in the context of forward planning Will help the firm with decision making

5. Business and Communication Systems Survival The business world is competitive, and it can be difficult for firms to survive. Survival means that firms need to break even and go on to make profits. Firms need to provide good service and a suitable product for the particular market. Additionally, a high standard of customer service will help to secure their survival. A business is likely to have survival as a central aim: –When it starts up –During difficult economic conditions

6. Business and Communication Systems Profit Maximisation This is typically the central aim of any business. The aim of making profit maximisation means that the business will want to use resources to the full and have as little wastage as possible. A business will have the aim of making a profit which: –Allows the owner/s to have a certain standard of living –Improves from one year to the next

7. Business and Communication Systems Growth In order to gain greater profits and to survive, firms may want to grow - so they can sell their product/service to a larger market and become better known. Growth also offers business increased security in that if its product/service proves unpopular in one area then the business may continue to do well in another area. A business is likely to have this aim when: –it has been established in the current market –it is making sufficient profits to finance the expansion

8. Business and Communication Systems Corporate Image and Public Service The aim of having a good corporate image, once a firm has established an image among consumers, it has to maintain or improve this image - this costs resources. A business will want to be viewed in a positive light by: –Customers –Suppliers –Other companies Having a positive corporate image should lead to customer loyalty, increased sales and profits. Public service is the main aim of public sector organisations.

9. Business and Communication Systems Concern for the Environment/Social Responsible Concern for the environment and social responsibility have become increasingly important. Firms can be environmentally friendly by: –encouraging customers to reuse plastic bags in supermarkets –by enhancing the environment around their business/factory eg by landscaping the grounds, planting trees etc –by sponsoring competitions in schools which draw attention to environmental issues, thereby raising awareness. Business has legal obligations not to damage the environment. A business can gain a positive corporate image by working towards achieving this aim.

10. Business and Communication Systems SMART Business aims should be SMART: Specific Measurable Achievable Realistic Time-bound

11. Business and Communication Systems Aims in Conflict Some aims which a business has can appear to conflict, for example: –Profit maximisation versus concern for the environment/social responsibility –Growth versus concern for the environment/social responsibility –A firm donating money to a charity may reduce the dividend received by shareholders because they want the firm to maximise profit but it would enhance the firm’s corporate image. –A business will want to make a profit but should also be ethical an moral in its practices, for example: Treat employees fairly Deal honestly with customers Refuse to deal with companies/countries where workers are exploited Reduce, reuse and recycle