What aims and objectives do businesses set, and why do they differ and change?
Business aims and objectives: the difference between an aim and an objective, common objectives such as survival, profit, growth, market share and providing a service, and why objectives differ between businesses and change over time.
A CCEA GCSE Business Studies guide to business aims and objectives. Covers the difference between an aim and an objective, common objectives such as survival, profit, growth, market share and providing a service, why objectives differ between businesses, and why they change over the life of a business.
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What this dot point is asking
You need to explain the difference between an aim and an objective, describe the common objectives businesses set, survival, profit, growth, market share and providing a service, and explain why objectives differ between businesses and change over time. CCEA examiners reward precise definitions, developed reasons rather than lists, and the ability to link an objective to a business's situation. Aims and objectives matter because they give a business direction and a way to measure whether it is succeeding.
Aims and objectives
The two terms are related but different, and examiners test that you can tell them apart.
In short, the aim is the destination and the objectives are the milestones along the way. A business that sets clear objectives can check its progress, focus its staff, and make better decisions.
Common business objectives
Different businesses pursue different objectives, but several appear again and again.
- Survival - getting through the difficult early period or a downturn without failing; usually the first objective of a new business.
- Profit - earning a surplus once established, to reward the owners and fund growth.
- Growth - increasing the size of the business, for example more shops, products or staff.
- Market share - increasing the share of total sales in the market the business holds, often to gain an advantage over rivals.
- Providing a service - offering a high-quality good or service, important for many small firms, social enterprises and the public sector.
- Customer satisfaction - keeping customers happy so they return and recommend the business.
These objectives are linked: survival comes first, profit allows growth, and growth can increase market share, so businesses tend to pursue them in a sensible order.
Why objectives differ and change
CCEA often asks why objectives are not the same for every business, or why they change.
For example, a brand-new cafe aims to survive its first year; once it has regular customers it aims to make a profit; after a few profitable years it may aim to open a second branch. If a recession then hits, it may return to simply surviving. The objective fits the situation, and the situation changes.
Worked example: choosing and justifying an objective
A common exam task is to identify a suitable objective for a described business.
Why this matters
Aims and objectives are the starting point for almost every business decision. A firm that knows whether it is trying to survive, grow or maximise profit will price, market and staff itself differently. Objectives also give a way to measure success, which links forward to business success and failure and to the financial measures in Unit 2. In the exam, the most valuable skill is to choose an objective that fits a specific business and justify it, and to explain change rather than just list objectives.
Try this
Q1. State the difference between an aim and an objective. [2 marks]
- Cue. An aim is the broad long-term goal; an objective is a specific, measurable target that helps achieve the aim.
Q2. Give two objectives a business might set. [2 marks]
- Cue. Any two: survival, profit, growth, market share, providing a service, customer satisfaction.
Q3. Why is survival usually the first objective of a new business? [2 marks]
- Cue. A new business has few customers, high start-up costs and an unknown brand, so it must avoid failing before it can aim for profit or growth.
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 Unit 1 (style)4 marksExplain why survival is often the main objective of a new business.Show worked answer →
An explain question testing AO1 and AO2. Give developed reasons.
In its first year a new business has few customers, an unknown brand and high start-up costs, so it can easily run out of cash.
Survival, getting through the difficult early period without failing, must come before profit or growth, because a business that does not survive cannot achieve anything else.
Once the business is established, with regular customers and steady cash flow, it can move on to objectives such as making a profit and growing. The marks are for clear reasons linked to the position of a new business.
CCEA Unit 1 (style)6 marksExplain why the objectives of a business might change over time.Show worked answer →
An explain question testing AO2. Give reasons with examples.
A new business usually aims first to survive. Once established, it may aim to increase profit, then to grow and gain market share.
Objectives also change because of outside events: in a recession a business may return to a survival objective; success may bring a new aim of expanding overseas; an owner nearing retirement may aim simply to maintain steady profits.
A developed answer links each change to a clear cause (stage of the business, the economy, the owner's situation) and reaches the higher marks; a list of objectives without reasons does not.
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Sources & how we know this
- CCEA GCSE Business Studies specification — CCEA (2017)