AQA · GCSE · Business
Course version: 8132 · Version from Sept 2017
Understand how and why the objectives set will differ between businesses…
Full specification wording
Setting business aims and objectives: understand how and why the objectives set will differ between businesses (reasons include the size of the business, level of competition faced and type of business (not-for-profit organisations))
Objectives vary because businesses face different circumstances.
Checked against the AQA 8132 specification (opens in a new tab) on .
- Point 8 of 10
- 4 key terms
Study notes
From the checked teaching notes for this specification point.
The idea
Objectives vary because businesses face different circumstances. A small sole trader may prioritise survival or steady income, while a large multinational may target market share or expansion. The level of competition matters: in a highly competitive market, a business may focus on price, quality or customer service to retain customers, whereas a business with little competition may set objectives around efficiency or profit. The type of business also shapes objectives: a not-for-profit organisation such as a charity or social enterprise may prioritise social or environmental outcomes over profit, though it still needs financial sustainability. Other influences include ownership, market conditions and stakeholder expectations. Understanding these differences helps explain why no single objective fits all businesses.
What earns the marks
- Size of the business: smaller businesses often set survival, cash flow or steady income objectives, while larger businesses may pursue growth, market share or profitability.
- Type of business: not-for-profit organisations typically prioritise social, charitable or environmental objectives, but must also achieve financial sustainability to continue operating.
- Ownership and stakeholder influence: a sole trader may prioritise personal income, whereas a public limited company may prioritise shareholder returns.
- Market conditions: during a recession, survival may become the dominant objective; during growth, expansion may be prioritised.
- Legal or regulatory factors: businesses in regulated industries may set compliance or safety objectives.
Common mistakes and how to put them right
Assuming all businesses aim to maximise profit.
Put it right: Recognise that objectives depend on the organisation's purpose and values.
Ignoring the impact of competition.
Put it right: Consider the competitive environment when explaining objectives.
Treating size as the only factor.
Put it right: Discuss multiple reasons and link them to specific business contexts.
Exam tips
- Use contrasting examples, such as a small local bakery versus a large supermarket chain, to show how objectives differ by size and competition.
- When discussing not-for-profit organisations, explain how they balance social aims with the need to generate enough income to cover costs.
- Structure answers around the named reasons in the specification: size, competition and type of business, and then add other relevant factors.
Try the lesson
The start of the Setting business aims and objectives: understand how and why the objectives set will differ between businesses (reasons include the size of the business, level of competition faced and type of business (not-for-profit organisations)) lesson, made from checked teaching notes for this specification point.
Have a go first
Which objective is most likely to be set by a not-for-profit organisation rather than by a profit-seeking business?
Listen
Objectives vary because businesses face different circumstances. A small sole trader may prioritise survival or steady income, while a large multinational may target market share or expansion. The level of competition matters: in a highly competitive market, a business may focus on price, quality or customer service to retain customers, whereas a business with little competition may set objectives around efficiency or profit. The type of business also shapes objectives: a not-for-profit organisation such as a charity or social enterprise may prioritise social or environmental outcomes over profit, though it still needs financial sustainability. Other influences include ownership, market conditions and stakeholder expectations. Understanding these differences helps explain why no single objective fits all businesses. A strong answer earns marks for these points. Size of the business: smaller businesses often set survival, cash flow or steady income objectives, while larger businesses may pursue growth, market share or profitability. Level of competition: intense competition can lead to objectives focused on customer retention, price competitiveness or differentiation, while low competition may allow objectives centred on efficiency or profit maximisation. Type of business: not-for-profit organisations typically prioritise social, charitable or environmental objectives, but must also achieve financial sustainability to continue operating. Ownership and stakeholder influence: a sole trader may prioritise personal income, whereas a public limited company may prioritise shareholder returns. A common slip: Assuming all businesses aim to maximise profit: not-for-profit organisations may have social or environmental objectives as their primary focus. Instead, recognise that objectives depend on the organisation's purpose and values. Exam tip: Use contrasting examples, such as a small local bakery versus a large supermarket chain, to show how objectives differ by size and competition.
See it
Key words
Say what each word means before you turn the card.
Competitive environment
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Organisational purpose
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Stakeholder expectations
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Business context and contingency
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See every definition
- Competitive environment
- The level of competition a business faces, which may lead it to focus on price, quality or customer service to retain customers.
- Organisational purpose
- The type of business, such as a not-for-profit organisation, which may prioritise social or environmental outcomes over profit.
- Stakeholder expectations
- An influence on objectives, where a sole trader may prioritise personal income whereas a public limited company may prioritise shareholder returns.
- Business context and contingency
- The circumstances a business faces, including size, market conditions and ownership, which help explain why no single objective fits all businesses.
Label the diagram
Some boxes have lost their names. Pick the right name for each number.
1Box 1
2Box 2
3Box 3
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