Performance, legislation and internal reasons
In response to performance
Often, a business will create new A 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. linked to its performance. For example, businesses will often look at where they can make improvements to their sales The income earned by a business over a period of time from selling its goods or services. or The amount of money made after all expenses have been paid., the impact of their marketing, or their The amount of work produced by a person in a given time..
If a business has suffered with poor financial performance in the previous year, it may have aims and objectives relating to improving its sales, revenue or profit over the next financial year. Often, even when a business is performing well financially, it will aim to improve and grow over the next year.
In response to legislation
Occasionally, Laws made by the government. is introduced that has an impact on a business’s aims and objectives. There are a set of laws specifically for businesses that govern how they operate. Examples include the Health and Safety at Work etc. Act (1974), the Equality Act (2010) and the National Minimum Wage Regulations (2016). Laws and regulations are legally binding, and businesses must comply with them to keep operating. Legislation may relate to areas such as recruitment, payment, health and safety, and competition.
If a new law is introduced or changed, eg if there is an increase in the minimum wage, a business may change its aims and objectives to accommodate this change.
In response to internal reasons
Internal reasons, such as strategic decisions made within a company, can impact a business’s aims and objectives. For instance, if a business decided to enter a A new country, area or target market that a business enters with the aim of selling or trading goods and services. or develop a new product or service, these changes would be in response to internal reasons. For example, a business might decide to sell its products to a country that it had not previously sold to. In this case, the business would have changed its aims and objectives to focus on entering a new market.
