2. Business 1 (01) 1.4 Business aims and objectives
OCR GCSE Business (1-9)
Business 1 (01)
1.4 Business aims and objectives

3. From the OCR specification
The aims and objectives of a business
Profit, survival, growth, providing a service, market share
How and why objectives may change as businesses evolve
Why different businesses may have different objectives

4. Worksheet

5. Lesson objectives
To be able to identify the aims and objectives of a business
To be able to describe how and why objectives may change as the business evolves
To be able to discuss why different businesses may have different objectives

6. Starter Do you have any of these aims?
To get a better phone for your birthday
To pass your maths GCSE
To get a part time job
To become a YouTube sensation
To get through the year without a detention
To learn the guitar
Students could share their aims, might be hard work depends on how warmed up the group are for a discussion. I usually start with a picture of a wood burning stove and put in that is my aim.

7. To be able to identify the aims and objectives of a business

8. Aims and objectives introduction
Aims are the strategic goals of a business; for example to grow
Objectives are more specific steps; for example to increase market share by 5% over the next year

9. Why does a business set aims and objectives?
(a) Setting business objectives gives specific targets by which business performance can be measured
(b) Setting objectives can be used to motivate workers to achieve
(c) Setting objectives clarifies business direction and aids decision making

10. Students should complete this diagram from their worksheet

11. Profit
Profit is total revenue (money into a business) minus total costs (money out of a business)
A business will aim to maximise profit, they must do this therefore in only two ways:
Increase revenue into the business
Reduce costs out of the business

12. Survival
In its first year of trading a start-up business may aim to just survive
When the business is more established the aims may change but if there is a recession or problems in the market then the business may keep this as one of their aims until sales improve

13. Growth As businesses trade the aims may be to grow the business
This may mean;
To sell more goods or services
To produce more goods
To provide more services

14. Providing a service A service is a task that is performed for money;
Hairdresser
Gardener
Cleaner
Insurance
Banking
A business may aim to provide a new service or improve on an existing service
A business that wishes to provide a service for the good of the local community is called a social enterprise

15. Market share
A business may aim to increase their market share. This is the percentage of sales held by a business in a market.
They will have to take sales away from competitors to achieve this aim
This could be done through;
Heavy promotion and discounts
To make the products look more appealing

16. To be able to describe how and why objectives may change as the business evolves

18. Start-up or established
Start-up or established? Choose aims and objectives from this list and place then where you think they should go
To increase awareness by customers of the business
To increase profits and meet returns on investment
To increase market share
To achieve market dominance
To grow the reputation of the business
Survival
To be UK market leader
To increase customer satisfaction levels
To be innovative, introducing new products to the market
To reduce the costs of the company by 25% by 2018

19. To increase awareness by customers of the business
To grow the reputation of the business
Survival
To increase profits and meet returns on investment
To increase market share
To achieve market dominance
To be UK market leader
To increase customer satisfaction levels
To be innovative, introducing new products to the market
To reduce the costs of the company by 25% by 2018

20. To be able to discuss why different businesses may have different objectives

21. Different businesses have different objectives
The scale of the business will have an impact on objectives
Do you think these businesses have the same objectives?

22. Different businesses have different objectives
The size of the business will have an impact on the business – the café on the left is the only one in the Uk the one on the right is part of a very large chain
Do you think these businesses have the same objectives?

23. Different businesses have different objectives
The ownership structure will have an impact on the business. Tesco is a plc and the shop on the right is a sole trader
Do you think these businesses have the same objectives?

24. Sample questions
Taken from OCR sample papers and the OCR check in tests, all in one place so you don’t have to go rooting round for them :0) You are welcome.

25. Sample question 1

26. Answer question 1
(a)Central government does not set business objectives; owners/directors/managers do this.
(b) Diversification relates to the range of business activities undertaken, it does not explain the reason for different businesses having different objectives.
(c) Correct answer: The objectives of a business change throughout the business’ lifetime.
(d) Copyright legislation stops one business copying another’s designs etc., but it does not cover objectives. A business is free to choose objectives as it deems to be appropriate.

27. Sample question 2
[1]

28. Answer question 2
(a)Setting business objectives gives specific targets by which business performance can be measured.
(b)Setting objectives can be used to motivate workers to achieve.
(c)Setting objectives clarifies business direction and aids decision making.
(d) Correct answer: Setting objectives may increase management workload, but this is not a benefit to a business. High workloads lead to inefficiency, mistakes, demotivation and stress.

29. Sample question 3
[1]

30. Answer question 3
(a) Market share measure the proportion of the market secured by a firm, the number of staff employed is irrelevant.
(b) Correct answer: Making products more appealing should increase sales, and hence market share.
(c) Reducing output is likely to reduce sales rather than increase market share.
(d) Spending less money is likely to increase profit, but has no link with market share.

31. State and explain one reason why a dentists partnership objectives may have changed after its first year of business

32. Previous objectives met
External influences have changed – increased competition, increasing/decreasing exchange rate, increasing unemployment
Internal influences – e.g., death of a partner

33. Glossary Aim of business; A purpose or intention (general statement)
Objective of business; how a business will achieve an aim (steps)

34. Resources written by Sarah Hilton for revisionstation.co.uk