1. Investigating people at work
Business Aims, Objectives and Organisation (1)
Business Aims,Objectives & Organisation

2. Business Aims,Objectives & Organisation
Lesson Objectives
In this lesson we will look at:-
Profit-making and Not-for-profit businesses
Objectives of a business, including
Aims & objectives
Mission statements
SMART objectives
Survival of businesses
Stakeholder’s needs
Maximising sales and profits
Growth of businesses
Business Aims,Objectives & Organisation

3. Business Aims,Objectives & Organisation
Basic definitions
Business - decision making unit created to make goods/provide services
Goods – things people buy to make better off
Service – an ‘intangible’ purchase
Product – a benefit we can see or touch (also used for intangibles)
Business Aims,Objectives & Organisation

4. Business Aims,Objectives & Organisation
Activity
Use these headings and draw up 2 lists of (1)Physical Goods and (2)Services,
The text book referred to above is GCE AS level Double Award Applied Business Written by Dransfield & Needham and published by Heinemann
Business Aims,Objectives & Organisation

5. Business Aims,Objectives & Organisation
For Profit Businesses
Most of these fall into one of the following categories:-
Sole trader (One owner)
Partnerships
Private limited companies
Public limited companies (plcs)
Business Aims,Objectives & Organisation

6. Where does the profit go?
Sole trader
– as income to the owner
Partnership
- divided between partners equally unless Partnership Agreement states otherwise
Private Co’s/plcs
- as dividend to shareholders
Business Aims,Objectives & Organisation

7. Not-for-profit organisations
These fall into two main types:-
Charities – set up for a particular purpose. Example is Macmillan Cancer Nurses. Surplus after costs not profits as such but retained for future use.
Voluntary organisations – mainly people who work unpaid for the benefit of needy.
NOTE – PEOPLE WHO WORK FOR A CHARITY ARE SOMETIMES PAID
Business Aims,Objectives & Organisation

8. Business Aims,Objectives & Organisation
Aims and Objectives
AIMS are stated in general terms eg
a travel agent’s might simply be “To sell holidays and make a profit”
BP’s aim might be “to prospect for oil, refine it and sell the products at a profit”
OBJECTIVES are sub-components of aims and can often be quantified eg
An airline’s objective may be to carry 2million passengers a year by a given date in the future
Business Aims,Objectives & Organisation

9. Business Aims,Objectives & Organisation
Mission Statements
Often used to set out general aim or purpose of organisation
Can give employees clear lead for their role and tell outsiders what organisation stands for
AIM MISSION STATEMENT
BUSINESS PLAN
Business Aims,Objectives & Organisation

10. Business Aims,Objectives & Organisation
S-M-A-R-T Objectives
SMART objectives are
SPECIFIC – exact and precise
MEASURABLE – it can be seen to be done
ACHIEVABLE – it can be done
REALISTIC – not a hopeless aim
TIME-RELATED – can be done within a pre-determined period
Business Aims,Objectives & Organisation

11. Business Aims,Objectives & Organisation
Specific Objectives
A business may have more exact objectives that are specific to its situation. These could include:-
Survival
Meeting stakeholder needs
Maximising sales revenue
Maximising profit
Growth
Business Aims,Objectives & Organisation

12. Business Aims,Objectives & Organisation
Survival
Any size business has on-going task in keeping going. Threats include:-
Change in fashion
New technology
Competition
Changes in customer habits (out of town shopping)
Business Aims,Objectives & Organisation

13. Meeting stakeholder needs
Business must consider needs of stakeholders, who include:-
Shareholders (owners for small businesses)
Employees
Customers
Government
Local community
Other businesses
Suppliers
Business Aims,Objectives & Organisation

14. Maximising sales revenue
Businesses aim to increase turnover as higher profits should follow
larger business
= greater economies of scale
=more profit
more profit
Business Aims,Objectives & Organisation

15. Maximising profits/surplus
To ensure long-term profits companies may have to sacrifice some short term gains to ensure market leadership
Examples of this include:-
Purchase of new plant & machinery from current profits to maximise future efficiency and thus profitability
Lowering prices to gain market share then gaining from increased overall customer spend
Business Aims,Objectives & Organisation

16. Business Aims,Objectives & Organisation
Growth
Businesses grow INTERNALLY (or, Organically)
by expanding their market
Widening their range of products and services
By gaining more sales
Businesses grow EXTERNALLY
By merging with another business or company
By taking over another company
Business Aims,Objectives & Organisation

17. Business Aims,Objectives & Organisation
Example of Growth
Ryanair–a very successful airline grew by
Developing new routes
Buying up rival airlines
Heavy price cutting
Business Aims,Objectives & Organisation

18. Lesson Objectives Revisited
In this lesson we looked at:-
Profit-making and Not-for-profit businesses
Objectives of a business, including
Aims & objectives
Mission statements
SMART objectives
Survival of businesses
Stakeholder’s needs
Maximising sales and profits
Growth of businesses
Business Aims,Objectives & Organisation