Summary Notes on Unit 1 of Business A-level (SMART objectives and measurement and importance of profit)
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Course
Unit 1 - Nature and purpose of business
Institution
AQA
This document is notes of what are SMART objectives, mission statement, and also goes into what are fixed, variable and total costs are and also how they are represented on a chart used to calculate breakeven output and margin of safety.
LO: to understand what business objectives are and why companies use them
SMART objectives: To increase the number of
Specific passengers that travel with the
Measurable airline in the holiday seasons by 20%
Achievable over the next 3 years.
Relevant (British Airways)
Timescale
Mission statement – a brief written statement of the purpose of a company or an organisation.
Guides the actions of the organisation, spells out overall goal, provides a sense of direction, and
guides decision making for all levels of management.
The relationship between mission and objectives:
Mission statement – overall reason of a business’ existence.
Corporate aims – the long-term targets and plans to fulfil the mission statement.
Corporate objectives – the medium to long term quantifiable targets to fulfil the mission
statement.
Corporate strategy – the actions to be taken by the business to achieve the objectives.
Business tactics – actions taken on a day-to-day basis to support the strategy.
Why businesses set objectives?
Common sense of purpose – to achieve mission statement
Motivate employees
Create reward systems – prizes, promotions, bonuses, keeping your job
Measure and review performance
Inform decisions to improve performance
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