1.

2 The organisation

1.2.1: Business objectives and their importance

UNIT 1.1
1.2 The Organisation
Target Learning Objective Outcome Who? Keywords

• Understand the need for • Aims


ALL
objectives in business
Demonstrate an C • Mission
understanding that • Identify the importance of statement
businesses can have businesses having objectives
several objectives – • Objectives
and the importance of
these can change • Profit
maximisation


Demonstrate understanding of MOST
different objectives such as
growth, profitability and market B
share
Aims of private and public
sector enterprises


SOME

A
 Aims

• An aim is a goal or target.

• A business may have more than
one aim.
• Aims should always be appropriate
to the business activity and size
of the business.
 Example of aims
• The main aim of the Australian football team
in 2012 was to win the World Cup.
• This aim would not have been
appropriate for a local club.
 Example of aims
• A school or college may aim to improve its
examination results (this links to the core
activity)
• A supermarket may aim to increase its profits.
• Microsoft wanted to gain a share of the
computer games market with its Xbox. This
aim would not have been appropriate for a
small, local computer company.
 Types of business aims

• A business aim does not always have to

be to make profit
Types of business aims: Private
sector
• To survive as a business or expand
• To make a profit
• Growth
• Increase market share
• Image, reputation and social
responsibility
 Aims: Public Sector
• Proving health care
• Providing education
• Providing community activities
 Mission Statement
• The overall reason for a business’ existence is known
as its corporate aim or mission.
• Eg. A business could set out to be ‘the lowest cost
producer in Europe's or ‘the worlds favourite car
hire firm’.
• A mission statement is meant to inspire and define
the underlying purpose of the organisation

‘To boldly go where no man has gone before’

-Star Trek
 From Mission Statement to
Objectives
• A mission statement may be motivating but it
lacks the specific information needed for
planning.
-What does ‘best industry mean’? Or ‘Most
profitable’?
• To plan properly a business needs to turn the
mission into a objective.
 Distinction between aims (or mission)
and
objectives

• Mission: The purpose of the business

• Aims: The goals the business wants to
achieve
• Objectives: Practical steps to achieve the
goals – usually quantified

An aim is what you set out to do

An objective is a target you want to achieve
 Objective

• Will specify exactly what the business

wants to measure, how much of an
increase it wants to measure and when it
wants to achieve its target.
‘To increase profits by 20% over a five-year
period’
The business then has to turn this overall
objective into more detailed targets for
individual departments and managers.
 Objectives

• Objectives are steps which help

to achieve an aim.
• All objectives should be measurable –
so that achievement can be checked.
• All objectives must be monitored
regularly – to check achievement.
 Objectives
The best objectives are SMART.

S Specific

M Measurable

A Agreed

R Realistic

T Time-constrained
Example of SMART objectives

S Save £130 for a holiday

M £5 per week

A Friends informed!

R Leaves £20 for spends

T Do for 6 months
 Lose 10 lb Weigh self each
Get Fit In 4 weeks week

Decide Aims Specify Check

Objectives Performance
Regularly
Setting and
Monitoring If unsatisfactory
Aims
And Take
Corrective
Objectives action
Adjust/review
objectives
Exercise more
Change Lose 10 lb in 10
aims weeks

Learn to drive
 Activity
• Write out your own aims for the next 12
months
• Under each aim write at least one SMART
objective for yourself
 Why set aims and
objectives?
• Aims provide a focus for the business.
• Aims highlight key areas of development
and achievement.
• Objectives ‘break down’ aims so that they
are easier to achieve
• Objectives can be ‘shared’ so that many
people are responsible for their
achievement in their
own areas.
 Example of shared objectives
Aim: To improve profits
Objective 1: To increase sales by 10%
over the next 6 months

• Sales investigate new selling opportunities

• Marketing increase advertising/promotions
• Production produce more to meet increased
demand
• Distribution increase supply of goods to retailers
 Summary
• Mission: The purpose of the business
• Aims: The goals the business wants to achieve
• Objectives: Practical steps to achieve the goals – usually
quantified.

• Aims must be relevant to the organisation.

• Objectives are steps to achieve targets.
• Objectives can affect everyone in the organisation.
• Objectives must be monitored regularly.
 p

• Businesses work to broad goals, which may

be broken down to objectives.
• Objectives should be SMART
• Broad objectives usually relate to profit,
growth & market share
Sell this Product
The challenge:
Identify an important
feature/concept from this
lesson…. ‘Sell it’ to the class.

• ‘Our product ‘setting aims’ are

like no other because…’
• ‘Your company needs to ‘have a
mission statement because’ our
product because…’
• ‘Setting Objectives will
revolutionise…
• ‘Benefits of setting aims is
groundbreaking because….’
Plenary
Level achieved_____
What do you now know as a What are your areas for improvement?
result of today’s lesson? What are you going to do about this?
 1.2 The organisation

1.2.2: Stakeholders and their differing objectives

UNIT 1.1
1.2 The Organisation
Target Learning Objective Outcome Who? Keywords

•

Identify, describe and explain ALL Managers
State the role of the the objectives of different • Shareholders
different groups stakeholder groups C • Stakeholders
involved in business • Suppliers
activity and their
objectives; consumers,
employees, managers,
owners, financiers and
shareholders

Explain the

Use examples to illustrate such MOST
stakeholder role objectives
B


SOME

A
 What are stakeholders?

• People or organisations with a special

interest in a business.
• This is normally because they are
directly affected by the business and
how it operates – both now and in the
future.

29
 Types of stakeholders

Customers
Employees
Financiers and
managers

Owners
Suppliers Stakeholders and
shareholders

Pressure The local

groups community
The
government
30
 Power and influence

• Some stakeholders are

powerful. They can
influence how the business
operates.
• Some stakeholders have
little power. The business
can virtually ignore their
views.

31
 Identify the powerful

Which three have the power?

• An individual employee in a large firm
• A bank which has lent a lot of money to a small
firm
• A supplier of a major product, eg Microsoft
• A small supplier to a large supermarket
• An important customer of a small firm

32
 Stakeholder interests
All stakeholders have different types of interests:
• Customers – price, quality, range of supplies,
opening hours, facilities, etc
• Employees – pay, working conditions,
job security
• Owners/shareholders – profit, share price,
dividends
• The local community – road building, pollution,
safety, house values, jobs

33
 Stakeholder interests
• Government – legal issues, environmental issues,
competition
• Pressure groups – interests of members
and those they represent
• Suppliers – price paid for their supplies,
further orders
• Financiers – profits, return on money
invested, repayments of loans

34
 Conflict and stakeholders
Conflict can arise in a business because stakeholder
objectives are different.

• Local community against expansion of business,

employees want job security
• Shareholders want high dividends, managers want
to use profits for investment
• Suppliers want high prices for goods they supply,
customers want low selling prices

36
 Stakeholder summary

All stakeholders have an interest in a business.

• Different groups have different interests
• Interests may conflict
• Business will be most likely to respond to
the most powerful groups

37
 p

• A stakeholder is an individual or group that has an

interest in decisions taken by a business.
• Sometimes stakeholders have the same interests,
but their interests may also differ and conflict.
• Owners are very important stakeholders. They play
a key part in setting up and ensuring the continual
success of a business.
• Main stakeholders are owners, employees,
customers, communities, government, pressure
groups, trade unions and employer associations.
 Grandma’s Trunk
Share with the class….‘When I opened grandma’s
trunk I found….’
• Keyword
• Fact
• Skill
Learnt so far in business.

How to play:
• http://www.blog.montessoriforeveryone.com/5-easy-travel-games-for-kids-on-the-go.html
1.2 The Organisation
Target Learning Objective Outcome Who? Keywords

•

Identify, describe and explain ALL Managers
State the role of the the objectives of different • Shareholders
different groups stakeholder groups C • Stakeholders
involved in business • Suppliers
activity and their
objectives; consumers,
employees, managers,
owners, financiers and
shareholders

Explain the

Use examples to illustrate such MOST
stakeholder role objectives
B


SOME

COMPLETE A
Plenary
Level achieved_____
What do you now know as a What are your areas for improvement?
result of today’s lesson? What are you going to do about this?
 1.2 The organisation

1.2.3: Aims of private and public sector enterprises

UNIT 1.1
1.2 The Organisation
Target Learning Objective Outcome Who? Keywords

• Public

Describe and explain the ALL
different objectives of Enterprise
Demonstrate an organisations in the different C • Non-Profit-
awareness of the aims sectors in an economy making
and objectives of • Private Sector
enterprises in both
private and public
sectors


MOST


SOME

A
 Public & Private sectors

• The aims and objectives of businesses will be

different depending on whether they are operating
in the private or the public sector.
 Activity
• Pg 38 of your text book.
• Complete exemplar exam question
Identify A01
Explain A04
 p

• Aims and objectives give organisations a direction to

work towards
• Private sector organisations seek to make a profit,
usually the main focus for their aims and objectives.
• Public sector organisations may seek to make a
profit but will focus on public service.
 Unwrap
the
‘present’
answer
the
question
(teacher prepare
before hand)
 1.3 Changing business environment

1.3.1: Government influence over decision making by using economic policy measures

UNIT 1.1
1.3 Changing business environment
Target Learning Objective Outcome Who? Keywords

Identify need for intervention ALL • Direct Tax

 State the role of the
government in
Show understanding of the
impact of intervention in terms C
•
•
Fiscal Policies
GDP
influencing decisions of business decisions e.g. what • Indirect tax
within local, national is produced and how • Inflation
and international Give examples of intervention • Monetary
contexts and explain both to support and control the Policies
how business may impact of business activity on • Money Supply
react people, the economy and the • Public
environment Expenditure

Demonstrate an

Know how interest rates affect MOST
awareness of the business
impact that tax and Know how different tax changes B
interest rate changes affect business
might have on Understand how business
business decisions decisions will be affected by
such changes

SOME
 A
 Starter
Pg 39 Question 1 - 4
 Group Activity
1. Why Does the government want to influence
business and the economy?
2. How does a governent get its money
3. How does the government spend its Money?
4. How do changes in taxation affect business?
Put in four groups
Receive a topic
• 10 - 15 mins plan
• 5 min present
 Activity

• Pg 50 – 62 ‘Complete Business Studies Titley

 In group
 Discuss
• Print as booklet
 Note

• NEED TO PREPARE
 p

• In every country the government intervenes in economic

activity.
• Reasons for intervention includes provisions of essential
services and protecting weaker members of society
• Examples of government intervention include taxes and
subsidies and running services such as public transport.
• Taxes earn large revenues for governments; they also
discourage certain types of activity.
• A Subsidy is a payment to encourage certain activities
• Rises in interests rates can reduce profits; a fall encourages
borrowing and can lead to more spending.