1. Business Aims & Objectives

2. Business Aims An aim or goal is a statement of purpose
Business aims or goals describe the overall rationale of the business; he reasons why the firm is in business

3. Mission Statement
A mission statement is a written statement making clear to all stakeholders a firm’s overall aims and values
It describes what the company wants to achieve and how it wants to act
It sets out the vision and values of a business
It enables the stakeholders of a business to understand to understand why the business is doing what it is doing!

4. Difference Between Aims & Objectives
General statement of purpose
E.g. we want to grow business in European markets
Objectives
Measurable target
E.g. we want to achieve sales of €10 million in European markets in 2004

5. Why Set Objectives Objectives give business a clearly defined target
Plans can then be made to achieve these targets
Can help motivate employees
Enables business to measure progress towards to its stated aims

6. Criteria for Business Objectives
Specific
Measurable
Achievable
Realistic
Timed

7. Levels of Business Objectives
Objectives are set at various levels in a business
Corporate objectives
Targets the whole business is trying to achieve
Often related to what the owners of the business want to focus on (e.g. survival, growth, profits)
Departmental objectives
Objectives for specific functions in the business
E.g. objectives for the marketing department to achieve
Need to be consistent with corporate objectives

8. Typical Business Objectives
Growth say by increasing sales and/or market share e.g. from 10% to 20% in next 12 months. Growth often allows firms to enjoy the benefits of
Economies of scale and the competitive advantage that comes from the resultant lower unit costs
Market leadership and the enhanced ability to set a price that meets objectives
Higher profits which mean higher salaries for managers and a higher share price for owners.
Profit say increasing return on capital employed to 5% by 2004 or improving earnings per share to maximise shareholder value and generating funds to support investment further and growth. Can mean making cost reductions a target
Survival small and simply want to continue in business by reaching break even within 12 months
Newly established firms may want to establish themselves in the market and ‘get known’ – they expect initial losses

9. Reasons Why Business Objectives Change Over Time
A business may achieve an objective and will need to move onto another one
E.g. survival in first year may lead to an objective of increasing profit in second year
Competitive environment might change
E.g. launch of new products from competitors
Technology might change product designs

10. Main Conflicts in Business Objectives
Growth versus profit
E.g. achieving higher sales in short term (by cutting prices) will reduce short-term profit
Short-term versus long-term
E.g. business may decide to accept lower cash flows in short-term whilst it invests heavily in new products or plant and equipment

11. Objectives of Public Sector Organisations
Required to deliver more than just a profit for shareholders
Many provide a form of public service (e.g. Royal Mail, BBC) in addition to commercial activities
May be involved with monitoring or control of private sector activities
E.g. Inland Revenue controls payment of tax by individuals and businesses
Aims of such enterprises would include ensuring compliance with law rather than, say, achieving a profit