Setting business aims and objectives: What are business aims and objectives

The idea

An aim is the long-term overall purpose of a business, the broad direction it wants to move in, such as survival, growth or providing a service to the community. An objective is a specific, measurable target that helps the business work towards that aim, for example raising sales revenue by 10% within twelve months or reducing waste by 5 tonnes per year. Aims and objectives differ in timescale and precision: aims are general and long term, while objectives are precise, often time-bound and can be checked. They also differ between businesses: a new sole trader may aim simply to survive, whereas an established plc may aim to maximise profit or increase market share. Objectives can be set for the whole business or for a department, and they should be consistent with each other so that effort is not wasted.

What earns the marks

• Defines an aim as the long-term overall purpose or direction of a business, giving a valid example such as survival, growth or customer satisfaction.
• Defines an objective as a specific, measurable target that supports an aim, giving a valid example such as increasing sales by 10% in a year.
• Explains at least one clear difference between aims and objectives, for example timescale, level of detail or whether progress can be measured.
• Applies the distinction to a business context, such as contrasting a new business aiming to survive with an established business aiming to grow.
• Recognises that aims and objectives can exist at different levels, such as whole-business aims and departmental objectives, and that they should be consistent.

Common mistakes and how to put them right

• Treating aims and objectives as identical.

  Put it right: An aim is a broad long-term purpose while an objective is a precise measurable target.

• Giving an objective that cannot be measured, such as to be the best.

  Put it right: Add a measurable element, such as to increase market share by 5% within two years.

• Assuming every business has the same aim.

  Put it right: Aims vary with size, age, ownership and market conditions, so a new firm may prioritise survival while a large firm may prioritise growth.

Exam tips

• Define both terms before comparing them, so the examiner can see you know the difference.
• Use a named or described business context to show application rather than writing in the abstract.
• When asked to explain, link the objective back to the aim it supports, showing the chain from broad purpose to measurable target.