Business Objectives (CIE IGCSE Business)

• Business aims are the long-term aspirations of an organisation
• Business objectives are specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that must be achieved to realise business aims
  
  
• Every successful business needs to have clear aims and objectives that guide its operations and focus the efforts of all employees towards the same goal 
  • Aims and objectives are critical for businesses to function effectively and achieve long-term success
  • A business aim may be to become the market leader in a particular industry
  • The corresponding objectives may include increasing sales by 25% over the next three years, improving customer satisfaction by 15%, and expanding into new geographic markets

A Diagram Illustrating the link Between Aims and Objectives

Objectives are derived from the overall business aim

• Objectives provide a focus or target for managers and employees
  • Managers can determine how well the business or particular departments have performed over a period of time
  • Employees may be rewarded for their progress towards meeting objectives
     

Examples of Common Business Objectives

• As businesses grow, their objectives often change over time
  • E.g. They may shift from survival and break-even to growth and profit maximisation

• Social entrepreneurs set socially-focused objectives for their business. They are in the private sector but do not have making a profit as their primary focus
  • They seek to make a profit in order to spend the money on achieving their social objective
     
• Objectives may include 
  • Social: to provide jobs and support for disadvantaged groups in society, such as the disabled or homeless
  • Environmental: to protect the environment
  • Ethical: to operate the business in a responsible way
  • Financial: to make a profit to invest back into the social enterprise to expand the social work that it performs
    
    
• Butterfly Books is a social enterprise that publishes children’s educational books in the UK
  • Their aim is to 'work to educate, inspire and entertain children, aiming to change future generations by reducing gender bias in job roles'
  • A recent book entitled 'My Mummy is an Engineer' challenges gender stereotypes

• As discussed in Topic 1.2 (Classification using the Public and Private Sector), businesses in the public and private sector have a different focus in terms of business objectives due to their ownership
  
  
• Firms in the private sector are owned by individuals or other firms, whilst those in the public sector are owned and controlled by the government
  

Public Versus Private Sector Objectives

• The goals and objectives are mainly financial in the private sector, whereas the public sector's are generally for the greater good of society