Changing aims and objectives in a business

When a business undergoes change it is often not just its operations that are altered. Typically, the aims and objectives of the organisation will be changed so that the company can work towards different targets. The evolution of aims and objectives is inevitable during times of extreme business growth so an organisation must ensure that it can instil new objectives into its staff quickly. Aims and objectives in a business can change at any time and may be impacted by:

• Market conditions – if an economy is failing or doing particularly well then a business will react to this. Companies will change their operations to meet the needs of their customers, so keeping a close eye on markets is essential
• Technology – new technologies can revolutionise the practices of a company. By making use of new techniques in manufacturing, sales or marketing, a business may be able to run more efficiently and therefore focus on new things.
• Performance – the performance of a business will dictate aims and objectives. If a company is not doing very well then it will need to focus on making money, as without funds the business might start to decline and run the risk of going out of business. For an organisation that is doing very well and offers something that is to the highest quality, objectives will be realigned to marketing and maximising the sales made.
• Legislation – changes in legislation can result in a business having to alter its objectives. When a government changes different laws it may make it much harder for a business to offer certain goods or services which leads to a decline in profitability. Changes in the law can make it very hard for a company to offer things which may even become illegal, so a business will need to fully understand any changes to the law.
• Internal reasons – the business may take on new staff or change its aims due to internal alterations. The company could simply decide to change its operations to make more money or improve standards.

Focusing on survival or growth

Businesses can either focus on survival or growth in their decisions. When focusing on survival, a company will need to make decisions that will enable it to continue making money and selling goods or services. This will ensure that the company can operate into the future and make more money but will not necessarily increase profits each year. Continuing the business each year will enable each person to continue taking a wage from the company and ensure long-term operations where the business brings in enough money to cover all its costs. If a business decides to focus on growth, as opposed to simply survival, decisions will be made that expand the workforce, product range or profits. Doing this may require more investment and new working practices which will lead to a risk for the business which may not be used to these new practices. Focusing on growth will help to generate more income each year for the company.

Entering or exiting markets

A business may look to expand into new markets as part of an expansion plan. These markets could be new areas of the world where existing products are sold or new goods/services that have not been previously offered. The aims of a business when entering new markets will be to make more money through offering something new. Should a business decide to exit a market it will stop offering goods and services to a specific area or group of people. This may be the result of a loss being made on products that are not very popular. Pulling out of a market requires a business to stop putting money into one area of the business and may result in assets being sold or staff being made redundant.

Growing or reducing the workforce

The growth or reduction of the workforce can be related to several factors. When taking on new staff the business may be entering new markets or offering new products that require more people to be employed. These extra workers will be required to help the company expand into new areas and make more money. A business that reduces the workforce could be changing in order to survive and run more efficiently, or it could be cutting a certain market that it usually catered for which did not provide the outcomes that were expected.

Increasing or decreasing product ranges

Closely linked to the exiting or entering of new markets, bringing new products to market (or dropping poor performing ones) will rely heavily on the wants of customers. When clients like a product and have a use for this they will be much more inclined to purchase from a company, so a business might look to increase the range that it offers. Alternatively, a product that is not well received might be dropped so that a business does not lose money on manufacturing costs for something that is very hard to sell.

Case study

The directors of Waterlife, a company that manufactures and sells sports water bottles, wish to grow their business and increase profits. They decide that this is what the company needs and that expansion will secure the future of the business. The directors conduct market research and see a gap in the market for water dispensers that can be put in offices and hotels.

Waterlife decides to take advantage of this gap and begins manufacturing water dispensers for offices and hotels – this is an example of the business entering a new market and increasing its product range simultaneously. To meet the increased demand, Waterlife employs more people and moves some of its existing staff away from marketing water bottles to focus on the water dispensers.

 This is a good example of how business decisions are all linked. The decision to expand leads to a decision of entering a new market and increasing a product range. This then leads to a growing workforce and the reduction of a different product range.