Year 12 - Unit 1

Business Aims, Objectives and Organisation

September 5th 2008

*Keywords sheet will be used throughout lessons – stick in front of note books

Look out for every opportunity to fill them in!

Learning Objective

To learn what are typical aims and objectives of business organisations.

Learning Outcomes

All of you will be able describe what a mission, aim & objective is.

Most of you will be able to give examples of business objectives.

Some of you will be able to suggest how a business can meet its objectives.

Starter

“A business is an organisation which provides goods or services for its customers”

Differences between goods and services. This will help in finding a businesses direction.

Activity: BIN CHUCKING!

It might be easier to look at it this way:Do the following businesses provide

goods or services or both?1. Thomas Cook2. Cadbury’s3. Direct Line Motor Insurance4. Coca-Cola5. Ferrari6. Tesco

Mission

A mission statement is a formal statement setting out the aims of the business.

E.g. Microsoft’s mission statement is...“To enable people and businesses throughout the world to realize their

full potential.”

On a Mission

Can you guess which companies have the following missions…

“To make people happy.”

Disney

“To refresh the world”

Coca-Cola“To bring inspiration &

innovation to every athlete in The world.*

*If you have a body you are an athlete

Nike

The Type of Business determines the Aims and Objectives it sets

Mining, farming, market gardening, fishing, forestry

Fruit into pies or juice, wood into chipboard, metal into cars

Not manufactured – catering, shops, insurance, travel, advertising

1. Primary: Extracting natural resources. Raw

materials

2. Secondary: Manufacturing Products. Processing raw materials into manufactured products

3. Tertiary: Providing Services

Businesses are generally put into 1 of 3

Industrial Sectors:

The Type of Business cont...

OwnershipKey word/term Definition Examples

•Public Sector

•Private Sector

Public corporations - Post Office, BBCGovt. Dept – Civil ServiceLocal Authorities - Councils

Sole Traders PartnershipsFranchisesLimited Companies

Government owned or govt. Controlled bodies. Restricted by government guidelines – ‘value for money’ rather than large profits. Job opportunities & secure employmentDirectly or indirectly in private ownership. General aims are to maximise sales, profits and market share.

Activity break

Take 5 minutes to fill in the table with as many businesses/companies you can list on the activity sheet 1

Aims

Aims are what a business set out to achieve

The most important aim of a private business is to make a profit by sellingor providing products to people who will pay for them.

If a private business does not make a profit, they will get into trouble financially and will eventually go bankrupt.

Aims: generally long term but can change through the years...1955 Aims: To survive in business for first year, To sell as many good as possible, To make a profit, To concentrate on selling to the local community

21st Century Aims:To expand and beat the worldwide competitionTo Maximise sales and profitTo help charitiesTo be environmentally friendly

Corporate social responsibilities/sustainability

Objectives

The objectives are the goals a business sets itself in order to achieve it’s aims

An objective is a short-term goal or target which will help to achieve an aim.

An objective must be measurable, so that a business can tell what has been achieved.

Check point!

An Aim or purpose expresses, in general terms, what the __________ sets out to do in the _____ term

An Objective is a specific ____ the business wishes to achieve to meet the _ _ _

A Business will succeed in its _ _ _ through the achievement of a variety of __________’s

Linking Aims & Objectives

Each aim may have several objectives, e.g. a company who wishes to dominate the market, may have the following objectives:Introduce new productsImprove the efficiency of the advertisingRaise money to develop new productRaise money for new premisesRecruit a new marketing manager

Review Activity – 20 mins

In pairs, choose either:1. An Existing Business/Company (where you or

someone you know works or would like to) or2. Invent your own Business/Company

You are the new Marketing ManagerCreate a 4 slide presentation to show:Page 1: Logo & short intro (which sector is it?, where based?

public or private?)

Page 2: Old business AIMS plus new improved onesPage 3: Existing Objectives vs. new improved onesPage 4: Create a new Mission Statement

Perspective onObjectives...

Making a Profit

“The profit of a business is the income from the sale of it’s products minus the running costs”

An important business objective is to maximise sales, which in turn creates profit

Profit Making OrganisationsProfit provides: Resources for business expansion

A reward or return on investment from the owners /shareholders in the form of dividends

Making a profit will be one of the main objectives of the business

Sales revenue – cost of sales = gross profitGross Profit – Overheads = Net ProfitsDividends are paid to the shareholders from the net profit

Perspective on Objectives cont..

Non –Profit making organisationsSome examples...

A non-profit organisation will not have ‘making a profit’ as one of their objectives

It will want to cover its costs and in some cases make a ‘surplus’

Why? Think about a charity or a public corporation (BBC)

Perspective on Objectives cont...

Growth – Increasing Sales & Market Share

Beating the competition may be a businesses main objective – the survival of the business may depend on it.

A weak Business can be a prime target for a takeover by another business

Survival – Objectives can work against each other Price cutting for growth can cut profits

Perspectives on Objectives cont..

Activity – Survival of the fittest

A number of businesses are cutting prices in order to increase market share..

1. Find out the lowest price of a sliced loaf of white bread from a supermarket and the price charged by a local corner shop

- What is the difference?- Why is there a difference?- What might happen to the business as a result?

2. Can you think of any other businesses which carry out cost cutting like this? What are those businesses aiming to do?

Up next...Providing quality (as an objective)Corporate Responsibility ObjectivesCaring for the environment –

sustainability

Internal stakeholders : the workplace and it’s culture