Aims-And-Objectives

The main business aims and objectives

• Aims and objectives are the long-term goals and specific, measurable outcomes that businesses hope to achieve in a given time period

• Businesses usually pursue one or more common business objectives

  • Many of these are financially-focused

    • Aims and objectives are centred on increasing revenue or profit, reducing costs, maximising returns for shareholders, growth, increasing market share or ensuring survival

  • Businesses may also pursue non-financial aims and objectives

    • These may include providing a service, fulfilling personal ambitions, making a positive contribution to society or improving employee welfare

Examples of common business objectives

• Every successful business needs to have clear aims and objectives that guide its operations and focus the efforts of all employees towards the same goal 

  • Aims and objectives are critical for businesses to function effectively and achieve long-term success

    • E.g. A business may aim to become the market leader in a particular industry by increasing sales, improving customer satisfaction and expanding into new geographic markets

• Aims and objectives can act as motivators, as workers can understand the contribution of their hard work to business success

  • Employees may receive a financial reward for their progress towards meeting objectives

• Investors and other interested stakeholders can understand the direction the business is choosing to pursue

  • This can help them decide whether to align themselves with the business

Differences in aims and objectives

• Business aims and objectives can vary significantly between different businesses for numerous reasons, including:

  • New businesses are likely to prioritise survival, whilst established businesses may be more likely to pursue growth

  • Small businesses may be focused on the personal objectives of their owners, such as achieving a good work-life balance, whilst very large businesses, such as PLCs, are likely to aim to satisfy the needs of their shareholders

  • Non-profit organisations are likely to prioritise their social aims and objectives, whereas for-profit businesses will often prioritise maximising sales and minimising costs

Different industries

• Businesses operating in different industries will have different objectives and aims

  • E.g. A healthcare company’s primary objective might be to improve the health and wellbeing of people, while a financial services firm’s objective might be to maximise profits

Size

• The size of a business can also influence its aims and objectives

  • E.g. A small business may focus on survival and achieving manageable growth, while a larger corporation may prioritise product diversification and market dominance

Culture

• Each business has its own unique culture, which reflects its values, beliefs, and overall vision

  • E.g. A business with an employee-focused culture is likely to prioritise their wellbeing, whilst a business with a target-driven culture is more likely to focus on financial objectives

Ownership structure

• The legal ownership structure of a business can influence its objectives

  • E.g. A family-owned business may prioritise long-term stability and legacy over short-term profitability, whilst a large public limited company is likely to prioritise maximising returns for shareholders

Geographic location

• Aims and objectives can differ depending on the area in which a business is located

  • E.g. Businesses in developing economies may prioritise job creation, with support from their government, whilst businesses in more developed economies may prioritise innovation and technology adoption

Why aims and objectives change

• As a business grows in size and evolves, its objectives can change

  • These changes are often necessary to ensure that the business remains competitive, profitable, and compliant with regulations

Focus on survival or growth

• A start-up business is likely to aim initially to survive by breaking even and becoming profitable

• As the company grows and becomes more established, its objective may change to focus on growth

  • This may include expanding into new markets or investing in new products or services

Entering or exiting markets

• A business may decide to enter a new market to expand its customer base or to diversify its products/services

• Conversely, a business may decide to exit a market if it is not profitable

Growing or reducing the workforce

• A growing business may need to hire additional employees to support its expansion

• Conversely, a business may decide at any point to reduce its workforce to cut costs or streamline operations

Increasing or decreasing product range

• A business may choose to increase its product range to expand its customer base or to stay competitive in the market

• Alternatively, a business may decide to decrease its product range if certain products are not proving to be profitable

Factors that cause business objectives to evolve