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Aims and Objectives Unit 1: Investigating Business. What is a business? What do businesses sell? Why do organizations have aims and objectives? What is the difference between the private sector and the public sector? How can setting aims and objectives help a business?. Learning objectives.
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What is a business? • What do businesses sell? • Why do organizations have aims and objectives? • What is the difference between the private sector and the public sector? • How can setting aims and objectives help a business? Learning objectives
The world of work The world of work is made up of many different types of organizations. They employ millions of people to do different types of jobs. You are going to learn about various organizations in order to answer the following questions: • What do they do? • What are they aiming to do? • How do they achieve their aims? Do you know who Britain’s biggest employer is? Do you know who the world’s biggest employer is?
Businesses and organizations What do the words ‘business’ and ‘organization’ mean? • Definition: business • a person’s regular occupation, profession or trade • the practice of making one’s living by engaging in commerce • trade considered in terms of profit and volume • Definition: organization • the action of organizing something • an organized body of people with a particular purpose, especially a business, government department or charity
Businesses A business is a specific type of organization which exists to sell products (goodsor services) to customers. Customers can be private individuals, like ourselves, or other businesses. Businesses aim to supply customers with the products they want so that they can make a profit. Unfortunately, some businesses do not manage to make a profit, meaning that they have failed to achieve their aims. The photo shows a house for sale. Is the estate agent selling it selling goods or services?
The private and public sectors Private sectorbusinesses are owned by private companies or individuals. They are run to make a profit. Public sectororganizations are owned by central government or regional authorities. They can be operated for the benefit of everyone or for one particular group. For example, the NHS is operated to benefit everyone in the UK, but a council nursery is run solely for young children and their parents.
What do businesses do? 1. Raw materials When you think of businesses, what do you imagine they do? Source raw materials?
What do businesses do? 2. Goods Sell goods?
What do businesses do? 3. Services Sell services? Businesses can sell anything that customers are willing to buy!
Analysing local businesses Enter your school’s postcode into the Google Maps website. Then type in the names of some organizations, e.g. doctors, butchers, cafés, etc. to gain a picture of the commercial landscape in your area. What type of goods or services do they sell or provide?
Purposes of businesses Every business exists for a purpose. It may sell goods or services. Mobile phone company Vodafone sells network coverage (services) and mobile phones (goods). Businesses must make a profit to exist. They need to know what they want to do and how they want to do it in order to attract and keep customers. Therefore, all businesses must have aimsandobjectives that identify what they wish to achieve.
Aims and objectives Aims are what the business wants to achieve, e.g. make a profit, be the best, attract new customers, etc. Objectivesare the targets that businesses set themselves to help them to achieve their aims.
Aims of a business The aims of an organization often include to: • create a profit or surplus funds • sell or provide goods or services • survive • expand • maximize sales • improve product quality • beat the competition • provide voluntary services • be kind to the environment. Why are aims important to businesses?
Aims of private sector organizations Organizations are divided into two sectors: private and public. The sectors have different aims as they do different things. Private sector businesses aim to make a profit to survive. They are usually owned by private individuals or groups. Businesses in the private sector can vary enormously in size – your local corner shop and the national chain Tesco are both in the private sector. Can you think of five private sector businesses?
Aims of public sector organizations Public sector organizations are owned or controlled by the government or regional authorities. They are not businessesbecause they are not seeking a profit; most of their money comes from funds that are acquired through taxes. However, public sector organizations often have similar aims to businesses, because they also need to run efficiently. Some industries, such as gas, postal, electricity, telephone and railway, used to be in the public sector but were privatizedin order to be more efficient. Can you think of five public sector organizations?
Personal aims and objectives We all have aims – your aim might be to pass your exams, save money or get fit. In order to achieve your aims you must set yourself objectives; for example, do your homework on time, save £5 per week or exercise daily. Setting objectives (targets) will help you to achieve your aims. How might objectives help businesses to achieve their aims?
SMART objectives Organizations set themselvesobjectivesto help them to achieve their aims. Many set SMART objectives: Specific 1. Specific means particular, not vague Measurable 2. Can be measured numerically Achievable 3. Can be achieved Realistic 4. Are realistic for the organization Timed 5. Have a deadline. What does each part of a SMART objective mean?
Aims and objectives Creating objectives can help an organization to measure its performance – to make sure that it is achieving its aims. They should be agreed by the people who have to achieve them to improve the chances of success. Here is an example of an aim with its SMART objective: Aim: make a profit Objective: increase sales by 10% in the next six months Write down a personal aim. Set a SMART objective and explain how it will help you to achieve it.
Case study: Bonnie’s Ice Creams Bonnie’s Ice Creams is a small business run and owned by Bonnie Tate. She loves being her own boss, but she wants to make some more money. 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?
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 • Unexpected events occur. • 2. Customer demand falls. • 3. Technology changes. • 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 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. 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. Measure Correct Review
Question time • Complete this sentence: A business is run to try and… • What are aims and what are objectives? Give three examples of each. • What is the difference between private sector and public sector organizations? Name two privatized industries. • Tesco wants to increase its sales over the next year. Is this a SMART objective? Explain your answer.
