Business Aims and Objectives

Business aims and objectives are very important for a business's success. Without them, a business lacks purpose and direction and consequently its workforce may lack the required motivation and drive. They are also important for the different departments within a business because they ensure that each business function, such as finance or marketing, are aware of their responsibilities in achieving the overall business aims.

One common mistake that business students make is to confuse the difference between an aim and an objective. I always use the example of a mountaineer. His/her aim will be to get to the top of the mountain. The objectives of the mountaineer will be how to get there, for example, to climb 500 metres in 2 hours. Therefore, we can say that a business's aim is what it is hoping to achieve, overall, typically within the long-term and its objectives are the steps that it needs to take to get there.

It is very important to remember that all objectives must be SMART (Specific, Measurable, Achieveable and Time-bound). An objective which is not SMART will come across as vague and non-specific to a business's stakeholders which means that employees, for example, will lack focus and may be confused about what they have to achieve within the business. It is important that an objective can be measured to determine whether or not it has been successful towards meeting the aim of a business and a SMART objective will allow this.

Business aims and objectives can mostly be found on corporate websites - a lot of these are linked to the mission statement of an organisation (see my blog below about mission statements). Some businesses may want to keep their objectives private from their competitors.

A very typical business aim will be 'to improve profits' and its SMART objective may be 'to increase sales by 10% over the next 6 months'. However, its important to understand that there are many different types of objectives and aims because these must be relevant to all of the different activities, types and sizes of business. Therefore, not all aims and objectives will be the same!

Tasks:

1. Explain in your own words what the differences are between a business aim and objective - use examples to help explain your answer.
2. Discuss the importance of having aims and objectives to a business. Write down your thoughts.
3. Identify a local business and find out from the owner/s what their overall aim is. Once you have identified this - come up with three SMART objectives that the business can use to help it to achieve this aim.