Content

• Whats the Purpose of setting objectives

  • Gives direction to the business
  • Helps measure performance
  • Motivates employees with clear goals
  • Supports strategic planning and decision-making
• why might a business change its objectives

  • External factors (e.g. recession → shift to survival)
  • Internal changes (e.g. new leadership)
  • Changes in competition or technology
  • New opportunities for growth
• Whats the impact of limited liability to a business

  • Reduces personal financial risk → encourages investment
  • Makes it easier to attract shareholders
  • May lead to riskier business behaviour
  • Encourages formal legal structure (Ltd or Plc)
• Why might a business choose to operate as a soletrader

  • Simple to set up and control
  • Full profits retained
  • Fast decision-making
  • Risk of unlimited liability
  • May struggle to raise finance
• What are the role of stakeholders in decision making

  • Owners want profit, customers want value, employees want security
  • Conflicting interests must be balanced
  • Stakeholder support influences reputation and performance
• Eval the importance of a clear mission statement for a business

  • Helps guide strategy and values
  • Attracts investors or employees
  • Builds brand identity

  Points against:

  • Can be vague or unrealistic
  • Doesn’t guarantee success
  • May not affect day-to-day operations

  Conclusion:

  • More important in early stages or competitive markets
  • Less useful if not backed up by practical actions
• Is profit the most important business objective

  Pros:

  • Enables survival, growth, rewards
  • Attracts investors

  Cons:

  • Ignores ethics, employees, environment
  • Not suitable for all businesses (e.g. charities)

  Conclusion:

  • Important but not always the only or most appropriate goal
• Is becoming a plc the best choice for a growing business

  Pros:

  • Large capital from public shares
  • Increased public profile

  Cons:

  • Risk of takeover
  • Increased regulation
  • Pressure for short-term profits

  Conclusion:

  • Depends on growth ambitions and ability to manage public ownership