3.1.1. the nature and purpose of business

• What is a business?

  The exchange of goods and services by an organisation

  Businesses are organisations that transforms resources into products that are purchased by their customers
• Why are businesses important?

  Provide jobs

  Sell services

  Innovation
• A mission statement sets out a business's overall purpose to direct and stimulate the organisation
• Aims are long term plans of the business from which the corporate objectives are derived
• Objectives are short-term in order to reach the aim, corporate aims are set by senior employees
• Objectives are medium to long term goals established to coordinate the business, effective objectives should be SMART
• What does SMART stand for?

  S- specific

  M- measurable

  A-agreed

  R- realistic

  T-timed
• What does pigs stand for?

  P- profit

  I- increase market share

  G- growth

  S- survival

  S- social/ethical

  
  

  They are all objectives
• Why set objectives?

  Closer to mission statement

  Helps different departments stay organised

  Help motivate employees

  Measures progress