© Boardworks Ltd 2007 1 of 27 Aims and Objectives Aims and Objectives Unit 1: Investigating...

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Aims and Objectives

Aims and Objectives Unit 1: Investigating Business

© Boardworks Ltd 2007

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Learning objectives

© Boardworks Ltd 2007

What is a business?

What do businesses sell?

Why do organizations have aims and objectives?

What is the difference between the private sector and the public sector?

How can setting aims and objectives help a business?

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The world of work

The world of work is made up of many different types of organizations. They employ millions of people to do different types of jobs.

Do you know who Britain’s biggest employer is?

What do they do?

What are they aiming to do?

How do they achieve their aims?

You are going to learn about various organizations in order to answer the following questions:

Do you know who the world’s biggest employer is?


Businesses and organizations

Definition: business a person’s regular occupation, profession or tradethe practice of making one’s living by engaging in commercetrade considered in terms of profit and volume

Definition: organization the action of organizing somethingan organized body of people with a particular purpose, especially a business, government department or charity

What do the words ‘business’ and ‘organization’ mean?


A business

A business is a specific type of organization which exists to sell products (goods or services) to customers.

Businesses aim to supply customers with the products they want so that they can make a profit. Unfortunately, some businesses do not manage to make a profit, meaning that they have failed to achieve their aims.

Customers can be private individuals, like ourselves, or other businesses.

Is the estate agent in the photo selling goods or services to her customers?


The private and public sectors

Private sector businesses are owned by private companies or individuals. They are run to make a profit.

Public sector organizations are owned by central government or regional authorities. They can be operated for the benefit of everyone or for one particular group.

For example, the NHS is operated to benefit everyone in the UK, but a council nursery is run solely for young children and their parents.


What do businesses do?

When you think of a business, what do you imagine it does?

Source raw materials?



Sell goods?



Sell services?

A business can sell anything that customers are willing to buy!


Enter your school’s postcode into the Google Maps website.

Analysing local businesses

What type of goods or services do they sell or provide?

Then type in the names of some organizations, e.g. doctors, butchers, cafés, etc. to gain a picture of the commercial landscape in your area.


Aims and objectives

Every business exists for a purpose. It may sell goods or services. Vodafone sells network coverage (services) and mobile phones (goods).

Therefore, all businesses must have aims and objectives that identify what they wish to achieve.

Businesses must make a profit to exist. They need to know what they want to do and how they want to do it to attract and keep customers.


Aims and objectives

Aims are what the business wants to achieve, e.g. make a profit, be the best, attract new customers, etc.

Objectives are the targets that businesses set themselves to help them to achieve their aims.


Aims of a business

create a profit or surplus funds

sell or provide goods or services

survive

expand

maximize sales

improve product quality

beat the competition

provide voluntary services

be kind to the environment.

The aims of an organization often include to:

Why are aims important to businesses?


Aims of private sector organizations

Organizations are divided into two sectors: private and public. The sectors have different aims as they do different things.

Businesses in the private sector can vary enormously in size – your local corner shop and the national chain Tesco are both in the private sector.

Private sector businesses aim to make a profit to survive. They are usually owned by private individuals or groups.

Can you think of five private sector businesses?


Aims of public sector organizations

Public sector organizations are owned or controlled by the government or regional authorities.

Some industries, such as gas, postal, electricity, phone and railway, used to be in the public sector but were privatized to be more efficient.

Can you think of five public sector organizations?

They are not businesses because they are not seeking a profit; most of their money comes from funds that are acquired through taxes.

However, public sector organizations often have similar aims to businesses, because they also need to run efficiently.


Public or private sector?


Personal aims and objectives

We all have aims – your aim might be to pass your exams, save money or get fit.

How might objectives help businesses to achieve their aims?

In order to achieve your aims you must set yourself objectives; for example, do your homework on time, save £5 per week, or exercise daily.

Setting objectives (targets) will help you to achieve your aim.


SMART objectives

Organizations set themselves objectives to help them to achieve their aims. Many set SMART objectives:

Measurable

Specific

Achievable

Realistic

Timed

1. Specific means particular: not vague

2. Can be measured numerically

3. Can be achieved

4. Are realistic for the organization

5. Have a deadline

What does each part of a SMART objective mean?


Aims and objectives

They should be agreed by the people who have to achieve them to improve the chances of success.

Creating objectives can help an organization to measure its performance – to make sure that it is achieving its aims.

Write down a personal aim. Set a SMART objective and explain how it will help you to achieve it.

Aim: make a profitObjective: increase sales by 10% in the next six months

Here is an example of an aim with its SMART objective:


Matching aims with objectives


Objectives case study

Bonnie’s Ice Creams is a small business run and owned by Bonnie Tate.

She loves being her own boss, but she wants to make some more money.

Bonnie’s aim is to improve her profits. She has set herself the SMART objective of increasing her sales by 15% over the next three months to help her to achieve her aim.

Are there any reasons why Bonnie might be unable to meet her objective?


Factors which can affect objectives

There are some internal and external factors which affect whether a business fulfils its SMART objectives.

External factors Internal factors

1. unexpected events occur

2. customer demand falls

3. technology changes

1. the objective is too difficult to be achieved in the time

2. production problems arise, e.g. with the machines, staff or deliveries

3. the customers’ needs are not catered for adequately

For each factor, write a scenario which could jeopardize Bonnie’s objective.


Hot seat activity


Meeting objectives case study

If she regularly measures her progress, Bonnie can correct any mistakes she may be making; she can also review her objective and make changes to it if necessary.

How can Bonnie measure her performance to make sure she completes her objective?

Bonnie should measure her sales daily, weekly and monthly to check that she is meeting her objective.

Measure ReviewCorrect


Question time!

1. Complete this sentence: A business is run to try and…

2. What are aims and what are objectives? Give three

examples of each.

3. What is the difference between the private sector

public sector? Name two privatized industries.

4. Tesco wants to increase its sales over the next year. Is

this a SMART objective? Explain your answer.


Who wants to be an A* student?


Glossary

© Boardworks Ltd 2007 1 of 27 Aims and Objectives Aims and Objectives Unit 1: Investigating...

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