What is a business trying to achieve and how does it set goals?
The aims, mission and objectives of a business, the use of SMART objectives, how objectives differ between the private, public and not-for-profit sectors, and how objectives change over the life of a business.
A CCEA A-Level Business Studies answer on business aims and objectives, covering mission statements, the hierarchy from aims to SMART objectives, common objectives such as survival, profit and growth, how objectives differ across sectors and how they change as a business develops.
Reviewed by: AI editorial process; not yet individually human-reviewed
Have a quick question? Jump to the Q&A page
Jump to a section
What this dot point is asking
CCEA wants you to explain the hierarchy from mission and aims down to specific objectives, define and apply SMART objectives, identify common business objectives, and analyse how objectives differ between sectors and change over a firm's life.
Mission, aims and objectives
A business sets goals at different levels, forming a hierarchy.
The hierarchy flows downward: the mission inspires the aims, the aims are broken into objectives, and objectives are turned into targets for departments and individuals.
SMART objectives
Objectives are most useful when they are SMART:
- Specific - clearly stated, not vague.
- Measurable - expressed with figures so progress can be judged.
- Achievable - realistic given the firm's resources.
- Relevant - connected to the firm's aims and mission.
- Time-bound - given a clear deadline.
Common business objectives
Businesses pursue different objectives depending on circumstances:
- Survival - staying solvent, the priority for new firms and during a downturn.
- Profit (and profit maximisation) - earning a surplus to reward owners and fund investment.
- Growth - increasing sales, capacity and market presence.
- Increasing market share - winning a larger slice of the total market.
- Customer satisfaction and quality - building loyalty and reputation.
- Social and ethical objectives - acting responsibly towards the community and environment.
Objectives across sectors
Objectives differ by the type of organisation:
- Private sector - profit, growth and shareholder returns dominate.
- Public sector - providing essential services, meeting demand and achieving value for money rather than profit.
- Not-for-profit and social enterprises - achieving a social or environmental mission and reinvesting any surplus into that cause.
How objectives change over the life of a business
Objectives are not fixed. A start-up usually prioritises survival and cash flow. Once established, the firm shifts to growth, increasing sales and capacity. A mature business may focus on profit maximisation to reward shareholders, or on diversification and innovation to defend market share. A downturn can push any firm back to survival. Objectives therefore reflect the stage, resources and competitive pressure the business faces.
Try this
Q1. State two common objectives of a private-sector business. [2 marks]
- Cue. Profit, growth, survival, increasing market share, customer satisfaction (any two).
Q2. Explain why a new business might prioritise survival over profit. [3 marks]
- Cue. A start-up faces high uncertainty and limited cash, so staying solvent comes before maximising profit, which can follow once established.
Q3. Analyse the benefits to a business of setting SMART objectives. [6 marks]
- Cue. Clear, measurable targets aid planning and resource allocation, motivate staff, and allow performance to be measured against a deadline.
Exam-style practice questions
Practice questions written in the style of CCEA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
CCEA 20184 marksExplain what is meant by a SMART objective.Show worked answer →
Worth 4 marks. Markers reward the meaning of the acronym applied to objective setting.
SMART objectives are Specific, Measurable, Achievable, Relevant and Time-bound. They turn a vague aim into a precise target.
For example, instead of the vague aim grow sales, a SMART objective would be increase sales revenue by 10 percent within the next twelve months. It states exactly what (10 percent sales rise), is measurable, is realistic, is relevant to growth and has a deadline.
Setting objectives in this way lets a business plan resources, motivate staff and judge afterwards whether the target was met.
CCEA 20227 marksAnalyse how a business's objectives might change as it grows from a start-up to an established firm.Show worked answer →
Worth 7 marks. Analyse needs developed points linking the stage of the business to its likely objectives.
Start-up stage: the priority is usually survival and establishing cash flow, because a new firm faces high uncertainty and limited resources, so simply staying solvent is the immediate objective.
Growth stage: once established, the business shifts to growth, increasing sales, market share and capacity to build a stronger position and benefit from economies of scale.
Maturity stage: an established firm may prioritise profit maximisation to reward shareholders, or diversify and innovate to defend market share against competitors.
Conclusion: objectives evolve from survival, through growth, to profit and consolidation, reflecting changing risk, resources and competitive pressure at each stage.
Related dot points
- The nature and purpose of business activity, the transformation of inputs into outputs, adding value, the factors of production, and the role of the entrepreneur in bearing risk and seizing opportunity.
A CCEA A-Level Business Studies answer on business activity and enterprise, covering needs and wants, the transformation of inputs into outputs, adding value, the four factors of production and the role of the entrepreneur in bearing risk and uncertainty.
- The internal and external stakeholders of a business, their differing objectives and the conflicts that arise between them, and how a business manages competing stakeholder interests.
A CCEA A-Level Business Studies answer on stakeholders, covering internal and external stakeholder groups, their differing objectives, the conflicts that arise between them, stakeholder mapping by power and interest, and how a business balances competing claims.
- The main forms of business organisation in the private and public sectors, including sole traders, partnerships, private and public limited companies, franchises, social enterprises and not-for-profit organisations, and the meaning of limited and unlimited liability.
A CCEA A-Level Business Studies answer on the forms of business organisation, covering sole traders, partnerships, private and public limited companies, franchises, social enterprises and the public sector, with the meaning of limited and unlimited liability and the factors influencing choice of structure.
- The nature of strategy and the difference between strategic and tactical decisions, SWOT and PEST analysis, Ansoff's matrix of growth strategies, and the process of strategic planning.
A CCEA A-Level Business Studies answer on strategy and strategic planning, covering strategic versus tactical decisions, SWOT and PEST analysis, Ansoff's matrix of market penetration, market development, product development and diversification, and the strategic planning process.
Sources & how we know this
- CCEA GCE Business Studies specification — CCEA (2016)