Purpose of objectives

• Businesses set aims and objectives to help with decision making and decide their main focus
• Aims and objectives show key stakeholders, such as investors and employees, the direction the business is planning to take
• Employees may be motivated by goals, encouraging them to work harder to achieve them
• Aims and objectives allow the business to set targets which can be used to measure progress
• Objectives are set to help a business achieve its aims and are often set using the SMART rule:

  • Specific
  • Measurable
  • Agreed
  • Realistic
  • Time-bound
• Reasons why aims and objectives differ between businesses:

  • Businesses have different purposes
  • Different levels of competition
  • Business operations vary in size and scale
• The type of business:

  • Private sector businesses focus on profit
  • Not-for-profit organizations focus on social or ethical objectives
• Business size and scale impact aims and objectives:

  • New businesses aim for survival
  • Established businesses aim for profit
  • Small businesses may aim to expand and increase the scale of their operations
• The level of competition in the market affects aims and objectives:

  • Competitive markets focus on gaining competitive advantage and increasing market share
  • Less competitive markets may focus on growth