Setting business aims and objectives - AQAChanging objectives
Businesses often set themselves targets that they want to achieve. These aims and objectives can be used to motivate employees and help a business measure their performance.
Why and how business aims and objectives change as businesses evolve
As a business evolves, it may change the aims and objectivesA business aim is the overall target or goal of the business, whereas business objectives are the steps a business needs to take to meet its overall aims. it sets. When a business is small, it may focus its aims and objectives on achieving break-evenBreak-even is the point at which revenue and total costs are the same, meaning the business is making neither a profit nor a loss. and survival Where a business aims to keep operating.. As a business gets larger it may start to focus on becoming the dominant business in the market, international expansion, increasing shareholdersA part owner of a private or public limited company. value and ethical and environmental considerations.
As well as this, businesses may have to change their aims and objectives in response to external factors such as:
new government legislation Laws made by the government. – new laws could impact on the costs of a business so they may have to adapt their profit objectives
changes in the economy – during a recessionA time of temporary economic decline when trade and industrial activity are reduced., a firm may choose to focus on survival rather than growth whereas during a period of boom, expansion might become the main focus
changes in technology – this could include the business becoming more focused on new production methods, e-commerceE-commerce is any transaction that takes place through the internet. or m-commerce M-commerce is any business transaction that takes place through a mobile device such as a phone or tablet. or new payment systems such as contactless paymentsA secure way for customers to purchase products or services using a debit, credit or smart card.
changes in environmental and ethical standards – as customers become more concerned with their impact on the environment, businesses may set environmental and ethical objectives to avoid losing customers
