Aims and Objectives

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Aims and Objectives

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Learning objectives

Why do organizations have aims and objectives?How can setting aims and objectives help a business?

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• Your Aim: Complete the AS Business Studies and get an A.

• An objective is to understand:

Aims and Objectives

Why do organizations have aims and objectives?How can setting aims and objectives help a business?


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.

Write your own definition of Aim and Objective.


Aims of a business

create a profit or surplus fundssell or provide goods or services survive expand

maximize salesimprove product qualitybeat the competitionprovide voluntary servicesbe kind to the environment.

The aims of an organization often include to:

Copy the list of aims. Why do you think aims are important?



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.


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


Case study: Bonnie’s Ice Creams

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

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?

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


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.


Case study: Bonnie’s Ice Creams

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


Different perspectives


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 private sector and public

sector organizations? 4.Saga Fallabella 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


Added Value and Profit

Objectives

• What is added value?

• What is profit?


Added Value and Profit


Added Value = Value of Outputs less Cost of Inputs and Processes

Inputs Processes Outputs


• Write your own definitions of:– Value Added– Profit

• How is value added by…– Volkswagen– Sebastian – my barber– Mano – my taxi man– Ripley’s


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Aims and Objectives