Aims and Objectives. Why do organizations have aims and objectives? How can setting aims and objectives help a business?. Learning objectives. Aims and Objectives. Your Aim : Complete the AS Business Studies and get an A. An objective is to understand :.
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Why do organizations have aims and objectives? • How can setting aims and objectives help a business? Learning objectives
Aims and Objectives • YourAim: Complete the AS Business Studies and getan A. • Anobjectiveistounderstand: • Why do organizations have aims and objectives? • How can setting aims and objectives help a business?
Aims and objectives Aims are what the business wants to achieve, e.g. make a profit, be the best, attract new customers, etc. Objectivesare the targets that businesses set themselves to help them to achieve their aims. Writeyourowndefinition of Aim and Objective.
Aims of a business The aims of an organization often include to: • create a profit or surplus funds • sell or provide goods or services • survive • expand • maximize sales • improve product quality • beat the competition • provide voluntary services • be kind to the environment. Copy the list of aims. Why do you think aims are important?
SMART objectives Organizations set themselvesobjectivesto help them to achieve their aims. Many set SMART objectives: Specific 1. Specific means particular, not vague Measurable 2. Can be measured numerically Achievable 3. Can be achieved Realistic 4. Are realistic for the organization Timed 5. Have a deadline.
Aims and objectives Creating objectives can help an organization to measure its performance – to make sure that it is achieving its aims. They should be agreed by the people who have to achieve them to improve the chances of success. Here is an example of an aim with its SMART objective: Aim: make a profit Objective: increase sales by 10% in the next six months Write down a personal aim. Set a SMART objective and explain how it will help you to achieve it.
Case study: Bonnie’s Ice Creams Bonnie’s Ice Creams is a small business run and owned by Bonnie Tate. She loves being her own boss, but she wants to make some more money. Bonnie’s aim is to improve her profits. She has set herself the SMART objective of increasing her sales by 15% over the next three months to help her to achieve her aim. Are there any reasons why Bonnie might be unable to meet her objective?
Factors which can affect objectives There are some internal and external factors which affect whether a business fulfils its SMART objectives. External factors Internal factors • Unexpected events occur. • 2. Customer demand falls. • 3. Technology changes. • The objective is too difficult to be achieved in the time. • 2. Production problems arise, e.g. with the machines, staff or deliveries. • 3. The customers’ needs are not catered for adequately. For each factor, write a scenario which could jeopardize Bonnie’s objective.
Case study: Bonnie’s Ice Creams How can Bonnie measure her performance to make sure she completes her objective? Bonnie should measure her sales daily, weekly and monthly to check that she is meeting her objective. If she regularly measures her progress, Bonnie can correct any mistakes she may be making; she can also review her objective and make changes to it if necessary. Measure Correct Review
Question time • Complete this sentence: A business is run to try and… • What are aims and what are objectives? Give three examples of each. • What is the difference between private sector and public sector organizations? • Saga Fallabellawants to increase its sales over the next year. Is this a SMART objective? Explain your answer.
AddedValue and Profit Objectives • Whatisaddedvalue? • Whatisprofit?
Writeyourowndefinitions of: • ValueAdded • Profit • Howisvalueaddedby… • Volkswagen • Sebastian – my barber • Mano – my taxi man • Ripley’s