PM/O2 OBJECTIVES 1

BUSINESS OBJECTIVES

Businesses have aims or goals which they try to achieve.

The objectives of an organisation will depend on:

• the type of the organisation• the size of the organisation• the goods/services which it produces• the competition it faces• the history of the organisation

PM/O2 OBJECTIVES 2

PROFIT MAXIMISATION

• To make as much money as possible is the main objective for a business in the private sector.

• This will be one of the objectives of– sole trader– partnership– private company– public company– franchise

PM/O2 OBJECTIVES 3

GROWTH• Many organisations aim to grow• Growth can mean firms

– are more competitive– can dominate the market– can control prices– reduce the chance of failure

PM/O2 OBJECTIVES 4

SURVIVAL• Continuing to trade is vital• New businesses want to avoid closure• Small firms want to avoid being taken

over by bigger firms• All businesses will be affected by

– recession– increased competition– reduced demand

PM/O2 OBJECTIVES 5

SOCIAL RESPONSIBILITY

• Many organisations aim to have a good image

• Social responsibility may involve– giving to good causes– protecting the environment– being a responsible employer– not exploiting customers or suppliers

Recycle waste

PM/O2 OBJECTIVES 6

PROVISION OF A SERVICE

• To provide services which people require

• A charity or local authority would have this objective

PM/O2 OBJECTIVES 7

“to increase market share means that I have to take a drop in profits, but it will be worth it in the long term.”

“I work hard to ensure that my business keeps ticking over.”

“It is important that society has access to free dental treatment.”

“We gave £5,000 to schools for computer equipment.”

“This year we made £21,000 profit – this was better than last year.”

Match the definitions shown below to the correct objective – profit maximisation, growth, survival, social responsibility and provision of a service

PM/O2 OBJECTIVES 8

Business Objective Reason

Marks and Spencer

Alfie’s Corner Shop

Victoria Infirmary

Prince’s Trust

Dyson Ltd

From the following list of businesses, decide what you consider a main objective could be. Give a reason for your answer.