A company can use a range of planning activities to help them achieve their aims and objectives. One of the planning activities they can use is budgeting. A budget is a financial

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Munira Yakub

Grandview Morning Press

Task 1

Every company or organisation has aims and objectives. An aim is the purpose for the company to exist and objectives are the steps that will need to be taken to reach the aim. These are necessary as it gives the employees direction and a goal to work towards. It also provides a framework around which to create plans. Companies can have a set of aims and they are usually referred to as the company’s mission statement. Mission statements can be viewed by the public on company reports and their websites.

Many organisations may share the same or similar aims such as: -

  • To make a profit
  • To increase profits
  • To increase market share
  • To survive

Charity organisations may have different aims as they are a non-profit-making organisation.

Aims are usually more general compare to objectives. Objectives are always SMART. This stands for: -

  • Specific – Objectives should specify what the company wants to achieve.
  • Measurable – the company should be able to measure whether you are meeting the objectives or not.
  • Achievable - Are the objectives you set, achievable and attainable?
  • Realistic – Can the company realistically achieve the objectives?
  • Time – When does the company want to achieve the set objectives?
  • In a large organisation each department may have different objectives e.g. the marketing department may have the objective of increasing brand awareness by the end of the financial year or the sales department may have the objective to increase sales by 5% by the end of the year. But for the company to succeed each department will be working towards the same aim.

Grandview Morning Press’s aim or mission statement may be: -

  • To be the best selling, most informative, most recognised and most up to date newspaper in the city.

 Their objectives may be:-

  • To increase market share by 10%
  • To increase profits by 15% in the summer
  • To increase community relations
  • To achieve better economies to scale.
  • To increase employee and employer relations.

A company can use a range of planning activities to help them achieve their aims and objectives. One of the planning activities they can use is budgeting. A budget is a financial plan for the forthcoming year that is drawn up to help a business achieve its objectives. They are also used as a method of control over the costs of the business. A budget can be made for each department for example the production department will have a budget to forecast how many units they will produce and so the company can plan how much and when raw materials need to be bought in. However this method can be unsuccessful if the departments do not stick to the budgets they have been allocated, if unrealistic budgets have been set or if the departments concentrate on their own objectives rather than the companies overall objective.

Another is critical path analysis. Critical path analysis helps to plan all the tasks that must be completed to complete a project. It can tell the company what is needed and when, it also allows you to monitor the project. It helps you to see where action can be taken to improve the project. The benefit of using critical path analysis is that it identifies tasks which must be completed on time for the whole project to be completed on time. It also identifies the tasks that can be delayed if a problem was to occur.

Another method is Gantt charts. These are used for analysing and planning. They help plan out the tasks that need to be completed first and helps plan when these tasks need to be completed.

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Another method is strategic analysis. This is where the business will evaluate their position; it includes different methods of assessing the current position of the business in the market. The two basic methods are internal and external. Internal audits use the information that is collected in the business e.g. productivity, efficiency, costs and SWOT analysis. An external audit is where the data is collected outside of the business e.g. competitors, PEST factors.

Strategic planning is also another planning activity. This is where the company may have a contingency plan, a fallback plan just in case things do ...

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