Aims and Objectives

• Business objectives are the stated, measurable targets of how to achieve business aims.
• Objectives must be SMART.
• S-Specific

  M-Measurable

  A-Achievable

  R-Realistic

  T-Time Bound/Timely
• Aims are where the business wants to go in future.
• This could be:

  -To increase sales

  -To maximise profit

  -To be environmentally friendly

  -To improve quality

  -To grow market share

  -To survive

  -To grow or expand into foreign markets
• A mission is the overall reason for the business' existence.
• It is the main purpose of a business and therefore determines the business' strategic position.
• A mission statement is a written statement that states the purpose of an organisation.
• A mission statement provides a common focus for everyone within an organisation and hence a common sense of direction.
• A vision statement supports a mission statement.
• It is a way of communicating with employees where the business is going in the future i.e. it's plans>
• Organisational values are the core principals that underpin the way a business behaves on a day to day basis and in decision making.
• They determine the culture of the organisation.

  -Culture is often defined as 'the way we do things around here.'
• Business aims and objectives will vary depending upon which sector it operates in.
• This could be due to whether it is in the:

  -Private Sector

  -Public Sector

  -Not for Profit Sector
• Private Sector Objectives:

  -Profit

  -Profit maximisation

  -Break Even

  -Survival

  -Growth

  -Market Leadership
• Profit:

  -To achieve a surplus of revenue over costs

  -Motive of entrepreneurs and shareholders

  -Important to survival and growth
• Profit maximisation:

  -To produce at the level of output where the surplus of sales revenue over total costs is at it's highest. PROFIT=SR-TC

  -This will help keep investors happy as well as fund growth.
• Break Even:

  -The point where a business is not making a profit or a loss i.e. sales revenue is equal to total costs

  -This is likely to be a short term objective of a new business.
• Survival:

  -To continue to exist as a business.

  -This may be the most important objective in the short term

  -This may be the primary objective of a start up business or one expecting difficult trading conditions.

  -To achieve this a business may set a cash flow objective to ensure sufficient cash is available to meet day to day expenses.
• Cash flow is the flow of cash into and out of a business over a period of time.
• Growth:

  -To increase in size either by value of sales or volume of sales.

  -This may be organically e.g. by opening new stores, launching new products or externally e.g. by joining with other businesses or taking them over.
• Market Leadership:

  -Market Share is the proportion of total market sales that a firm has in the market.

  -Market Leadership is when a business is dominant i.e. it has the highest market share.
• Public Sector Objectives:

  -Service Provision

  -Cost Control

  -Value for Money

  -Service Quality

  -Meeting Government Standards
• Service Provision:

  -To provide services demand to be beneficial to society e.g. street lighting, NHS
• Cost Control:

  -Keeping within budgets as set by the Government,
• Value for Money:

  -When giving grants for a specific purpose or allocating budgets e.g. defence budget that these are being used effectively hence giving the government value for money.
• Service Quality:

  -Meet customers' expectations in terms of the quality of service received and perception of value for money if financial contributions are made towards receiving the service e.g. an NHS dental appointment.
• Meeting Government Standards:

  -Meeting targets set by the government e.g. response time to 999 calls.
• Not For Profit Organisations:

  -All will have an overriding objective to support and further the work of a specific cause for the good of society.

  -They will still want to maximise the surplus of revenue over costs in order to plough this back into their work.
• Possible specific objectives include:

  -Education

  -Housing

  -Alleviating poverty

  -Healthcare
• Education:

  -To achieve literacy and numeracy targets for all children by the time they leave primary school.

  -To educate society about healthy eating in order to reduce national obesity.
• Housing:

  -To support first time buyers allowing more people to own their own homes.

  -Provide social housing for those most in need.
• Alleviating Poverty:

  -To alleviate poverty at home and across the world.

  -Provide food for those who are hungry.
• Healthcare:

  -Reduce NHS waiting times.

  -Provide care for the vulnerable in society.

  -Fund research into new cures for diseases.
• Reasons why objectives should be SMART include:

  -Can measure performance against them

  -Quantifiable

  -Realistic but with challenge

  -Easy to understand and share
• An example of a SMART objective is:

  -To achieve a 5% rise in revenue on women's clothes each year for the next 3 years.