The organization focus

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The main purpose of setting aims and objectives for a business is to give the organization focus. Other purposes are to achieve the efficiency and to tell the business community “what the organization does, now and in the future”. Examples of aims and objectives: a) Survival – it becomes very important for companies when they face difficult periods of trading. At some point many organizations will face difficult times when they have to consider closing down. When survival is the only aim, the organization may have to lose members of staff or cut costs.

Survival is a major objective for every sector of ownership and also for the primary sector of industry because at the moment this sector as a whole is declining. Although there are areas in which profit can be made such as an organic food production, there are no longer advantages to start a new business in the sector where the output and the trend for farms is going down and is being replaced by fish farms and organic food farms. That is why the survival is the main aim for farms which produce fruits and vegetables and for companies which extract minerals because although at the moment such companies are making a profit, minerals are non-renewable product which is limited in supply and eventually will be completely used up.

b) Breaking Even – a business break even when its income is equal to its costs. When its costs exceed its income, the organization has made a loss. Breaking even is a main aim for the public sector of industry because organizations must operate within budgets set by local or central government. The government gives all money needed to run a business such as a swimming pool. If a swimming pool will not break even, the government will not give any additional donations so finally the swimming pool will be closed down.

c) Growth – is a gradual process, supported by profits or loans that allow organizations to take an advantage of the current situation of success. But businesses need to be careful because they do not want to be overwhelmed by customers who they can not serve and they do not want to grow too fast and add huge costs to the running of the organization without knowing whether their income will increase.

Growth is an important objective for every sector of industry as well as for every sector of ownership. Every business would like to get bigger and bigger in terms of size or scale because in addition will make a greater profit. Although voluntary sector do not exist for profit, its objective will also be ‘growth’ because there is a need for its services. d) Increased Profits – means selling product or service with the largest possible difference between the cost of production and the price for which it is sold. Profit maximization relies on efficiency. It means making the best use of employees, premises and equipment.

Increasing profit is a major aim only for the private sector of industry which is owned by individuals because without making a profit, businesses would not be able to survive. Organizations in the private sector can increased their profits by selling products on price which covers all the costs of the production and is competitive, otherwise stock will remain unsold. The public and voluntary sectors of industry do not need profit to survive because they are sponsored by the government.

e) Better Service To Customers – customer service is being one of the most important aspects of a successful business. An organization will ensure that all contact with customers is on the highest possible quality and that in the event of a complaint the issue is dealt with efficiency. Better service to customers is important objective for all businesses in every industrial sector and every sector of ownership. This happened because the excellent customer service is the one thing that will make a customer choose one business instead of another and if an organization has more customers in addition makes much more profit.

f) Increasing Market Share – market share is the percentage of sales that is held by an organization and can be measured either in terms of the income generated by sales or the number of products sold. Businesses will attempt to control as much market share as possible and any increase in sales will mean that a competitor ha suffered losses in sales. Increasing market share is one of main aims for organizations in the private sector of industry (public limited companies) because this sector is owned by individuals who are seeking to make as much profit as it is possible. If a company will increase its market share, the shareholder will be then able to for example sell his/her shares for the higher price than he/she bought them. Also by increasing market share, an organization will beat the competitors because will attract more customers. A good example of such company can be Easy Jet.

g) Building Wider Business Networks – many businesses operating across the world will have relationship with thousands of the businesses, both as customers and suppliers to the business. As organizations develop, will seek to continue their relationship and improve them as much as possible. Building wider business links is important objective for most of organizations in every sector of industry and every sector of ownership. Building wider links is essential for companies because thanks to that, they get a chance to promote themselves to wider community which helps to attract more customers and to make a greater profit. A good example of such relationship between two partners is BP connected with Marks & Spencer where customers are able to buy Marks & Spencer products on BP stations.

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