What is a business
Write down what you think the word business means.
Then look it up and jot down 2-3 other definitions.
To be “in business” means an individual or group of
people have agreed a common goal and are actively
working towards achieving this goal by supplying
products or services to customers. This will be the
definition of business used throughout the course.
All Businesses have,
Business aims and Objectives
What do we mean by Aims &
Objectives?
Business activity is focused around the achievement of business aims and business
objectives.
A business aim is the goal a business wants to achieve. A primary aim for all business
organisations is to add value and in the private sector this involves making a profit.
More strategic aims include expansion, market leadership and brand building.
A business objective is a detailed picture of a step you plan to take in order to achieve
a stated aim. These need to be SMART in order for the business to know what
progress it has made towards achieving the objective:
Specific - clear and easy to understand.
Measurable - i.e. able to be quantified.
Achievable - possible to be attained.
Realistic - not 'pie in the sky'.
Time bound - associated with a specific time period.
Corporate aims
The corporate aims of a business are its overall purpose.
This is what the business is trying to achieve in the long
term.
Different types of business will have different aims. Lets
have a look at Tesco
http://www.tesco.com/investorInformation/report97/revie
w/page1.html
Survival
All business will consider survival
 Early stages of trading
 When trading becomes difficult (during a
recession)
 Threat of takeover

Profit
It is often argued that the main objectives
of private sector business is to make
profit
 In practice a business is more likely to
have a satisfactory level of profit as an
objective. This is know as SATISFYING

Growth
Many businesses pursue growth as their
main objective
 It is argued that firms must grow in order
to survive
 Failure could result in a number of
factors. Can you think what these

might be?

Increasing shareholder value
Many public limited companies aim to
increase shareholder value
 Legislation requires companies to
publish a measure of shareholder value
in their annual reports.
Lets have a look and examine Tesco
annual report.
http://www.tescoplc.com/files/reports/ar201
2/index.asp

Managerial objectives
Common examples
 Maximise personal salary
 Maximise their departmental budget
 Improve their status and recognition
 Maximise the number of employees in their charge
 Maximise their leisure time
 Delegate as much work as possible
 Maximise fringe benefits
Abuse of power
Sales revenue maximisation
Where a business try to gain the highest
possible sales revenue.
 This objective will be favoured by those
employees whose salaries are linked to
sales.

Image, reputation & social
responsibilities
Business have started to appreciate how
important image is.
Why has this happened?
 Legislation has been passed which favours
customers
 There have been changes in social attitudes
 Competitive pressure forced on business to
take into account the needs of others
Image, reputation & social
responsibilities
To customers
 Employees
 Suppliers
Discus the above and feedback on why
you think this is important

Behavioural theories
Assume that business objectives are not
determined by owners and managers
alone.
 Stakeholders, such as the government,
customers and pressure groups, may
affect the firms objectives.

Can you find 2 examples of this

happening?

Business operations
Business sometimes set objectives for
the operation of the organisation
For example they may decide
 They need to diversify-What does this
mean?
 To change focus-What does this mean?
Can you give 2 examples of
different business that have
done this?

Objectives in the public sector
This is a result of government policy in
the last two decades
Historically, the main objectives of public
sector business was to supply a public
service. British gas, British rail, NHS
Name 2 public sector
organisations and find out what their
objectives are

What determines business objective
Size & status of the business
 The power of the share holders
 Ownership
 Long and short term objectives
 External & internal pressure
 Risk
 Corporate business culture

Mission Statements
Businesses are increasingly producing
mission statements.
 These include descriptions of he overall
aims of the business, they tend to be
aimed at the stakeholders in the
business.

Lets look at Tesco’s
Tesco’s mission statement: “Our vision is for Tesco to be most highly
valued by the customers we serve, the communities in which we
operate, our loyal and committed staff and our shareholders; to be a
growth company; a modern and innovative company and winning
locally, applying our skills globally.”
Tesco’s mission statement is aimed at motivating the staff and giving
a simplified objective about what they aim to achieve. From the
mission statement Tesco want to earn respect from its customers by
providing a good service, and being loyal to its staff and customers.
Also they state that as a company they wish to grow and modernise
and start open up into new markets
Activity
Using the internet find out the aims and
objectives for Tesco- Using your work
books write out the aims and objectives for
Tesco making sure you have written them
in detail.
For example: One of their objectives is to
grow the UK core-what does this mean?
You will need to use your research skills
To grow the UK core
Tesco’s goal ‘to grow the UK core’ is according to their
website, as relevant today as it was in 1997. The UK is
the largest business in the Group and a key driver of
sales and profit. This year, Tesco are making a £1 billion
commitment to improve the shopping trip, driving a
strong pace of improvement in the things that matter for
customers which will involve significant revenue and
capital investment. These changes will reinvigorate the
shopping trip for customers, and consequently deliver
improved performance for shareholders.
Home work Activity
In your text books define the following
terms giving an example for each
•
•
•
•
•
•
A business
Products
Service
Aim of a business
Objectives
SMART
• Growth
• Survival
• Increasing your
market share
• Increasing share
holder value
• Diversify
• Maximise profit
• expansion