Unit 1 Investigating People at Work Business Aims & Objectives “The business of business is business” Milton Friedman, Economist

Why does a business need aims & objectives? Business aims long term aims The long term aims of the business… could be expressed as a mission statement Objectives How the business will achieve it’s aims. Businesses can measure their performance by making it’s objectives SMART

Business Objectives 1. To make a profit or surplusTo make a profitor surplus 2. To increase sales or market shareTo increase sales or market share 3. To surviveTo survive 4. To provide a service to the publicTo provide a service to the public 5. To help people or the environmentTo help people or the environment 6. To develop the skills of the workersTo develop the skills of the workers 7. To produce high quality goods or servicesTo produce high quality goods or services 8. To be socially responsibleTo be socially responsible

Most businesses seek to make or maximise profits Profits = sales – costs Businesses need profits to expand the business: –Open new outlets/ expand overseas –Improve/ expand the product range –Invest in new technology Profits have to be paid to shareholders in the form of dividends  Why is it important for a football club to make a profit? 1. To make a profit

To make a surplus Not-for-profit organisations do not need to make a profit to pay to shareholders They need to make a surplus, which can be paid to their chosen cause A surplus means the money which is left over after all costs are paid Surplus = income - expenditure Back to main slide

Many large organisations are driven by this objective The market for a product means all the customers who buy that particular product, from all producers in the industry Market share for a producer means how many customers buy the product from that business The business with the largest market share is called the market leader 2. To increase sales or market share

Benefits of being the market leader Able to benefit form cost savings, as producing on a large scale E.g. advertising, buying discounts, production costs Have money to spend on advertising or researching new products Market leader is best known brand for consumers Back to main slide

Survival means to be able to continue trading This involves being able to cover all costs, although no profit may be made This point is called breakeven point: BEP is where sales = costs (profit = 0) Many small or new businesses are just trying to survive into the future Some large organisations have been faced with this e.g. Barclays in 2000 May involve cutting costs e.g. closing branches, losing staff 3. To survive Back to main slide

This is the main objective of the public sector E.g. the NHS exists to provide healthcare services This responsibility arises as the services are funded by our taxes Usually the businesses have to be run in a profitable way in order to survive  Find out what the main objectives of the NHS or BBC are using their websites 4. To provide a service to the public Back to main slide

This is the objective of the voluntary sector These organisations have a wide range of objectives e.g. –Shelter aims to find housing/ help for homeless people –Oxfam aims to reduce poverty in the 3rd world –RSPCA aims to end animal cruelty and neglect –Greenpeace aims to protect the environment The businesses have to be run efficiently to enable them to survive and make a surplus 5. To help people or the environment Back to main slide

The importance of people in organisations is now widely recognised A well-trained and motivated workforce can play a big part in helping the business meet its other objectives Businesses aim to improve workers’ skills in the following areas: –IT –Communication –Decision making/ problem solving –Customer service –Knowledge of the business sector they operate in 6 To develop the skills of the workers. Back to main slide

Quality means producing a good or service which meets or exceeds customer requirements i.e. ‘fitness for purpose’ Businesses must satisfy customers in order to beat the competition Quality can be affected by the product itself, the customer service or the convenience offered  Have a look on IKEA’s website to see how they focus on quality 7. To produce high quality goods or services Back to main slide

Many large organisations rely on a positive public image to increase sales This image can be developed by being seen to be socially responsible This can take the form of: –Spending money to protect the environment –Changing production methods to be more environmentally friendly –Donating money to a good cause –Helping the local community e.g. by sponsorship  Have a look on Tesco’s or Shell’s website to see how they aim to build their corporate image 8. To be socially responsible Back to main slide

Objectives should be SMART Specific Measurable Achievable Realistic Time-bound