Summary and Exam Tips for Business Objectives
Business Objectives is a subtopic of Business Activity & Influences on Business, which falls under the subject Business Studies in the Edexcel IGCSE curriculum.
Businesses can have multiple objectives, categorized into financial and non-financial aims. Financial objectives include survival, profit, sales, market share, and financial security. Non-financial objectives focus on social goals, personal satisfaction, challenge, independence, and control. Business objectives are dynamic and evolve due to changes in market conditions, technology, performance, legislation, and internal factors.
The concept of business objectives revolves around setting targets that guide a business's efforts. These objectives motivate employees, enhance efficiency, and allow managers to assess business success. Key types of business objectives include survival, especially crucial for new market entrants, and profit, which is the total income minus total costs. Businesses also aim to provide returns to shareholders, ensuring managers remain in their positions and shareholders retain their shares. Growth objectives focus on expanding business size, securing jobs, increasing salaries, and achieving economies of scale. Increasing market share is another objective, offering benefits like reduced competition and greater supplier influence.
Business objectives may change over time. For instance, a business initially focused on survival may later aim for growth, or during economic hardships, shift from profit targets to survival.
Exam Tips
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Understand Key Terms: Be familiar with terms like financial objectives, non-financial objectives, economies of scale, and market share. Knowing these will help you answer questions accurately.
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Dynamic Nature of Objectives: Remember that business objectives can change due to external and internal factors. Be prepared to discuss examples of how and why these changes occur.
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Application of Concepts: Practice applying concepts to real-world scenarios. For example, explain how a business might shift its focus from survival to growth.
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Formula Familiarity: Know how to calculate market share and understand its significance in business strategy.
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Link Objectives to Business Success: Be ready to explain how achieving certain objectives can lead to overall business success and stability.
