Owen England                28/04/2007

Section 2 –

Business Objectives

All businesses have objectives. What these objectives are depends on the type of company it is. With sole traders and partnerships the objectives are governed by the owners. However in public & private limited companies, the shareholders along with the owners are in control of the direction and objectives of the business.

A shareholder is someone who has an interest in the company and owns a proportion of t through shares. This means that they have say in some aspects of running the company.  By having shareholders it gives the business a clear direction and enables them to judge their performance.

Businesses also have aims to work alongside their objectives. Aims can also be referred to as missions, and businesses often publish a ‘mission statement’. Some examples of mission statements include these from two major companies;

CCL Computers: “CCL are committed to offering the right product, at the right price and the right time”

McDonalds: “McDonalds are committed to providing high quality food, using the best raw ingredients, working with trusted suppliers and ensuring consistent preparation standards”

Businesses use the abbreviation SMART to shape their objectives. SMART stands for Specific, Measurable, Achievable, Realistic & Time constrained. There are many types of business objectives in the private sector, depending on the business situation and their general direction in the market, they are as follows:

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  1. Survival – When a business is in its early stages then it will want to survive, it will shape its objectives to make trading easier and maximise profits. Another threat to a businesses survival is corporate takeover, to prevent this a business would have to reshape their objectives.
  2. Profit Maximisation – This is exactly as it sounds, for many reasons a business will need to maximise profits and to do this suitable objectives will have to be drawn up. Some business may choose to go for long term profit maximisation to ensure that they make lots of ...

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