Credit value: 5

Business
2organisations
There are over 2.16 million business organisations in the UK. Most are quite
small. 89 per cent employ fewer than 10 people and 98 per cent have fewer
than 50 employees. Only 0.4 per cent employ more than 250 people.
What do these organisations have in common and what are their differences? If you have studied
Unit 1, you know that all businesses exist for a purpose. To be successful, businesses must identify
what they want to achieve in the future and then decide how to accomplish this. It is known as
setting aims and objectives.
To achieve their aims and objectives, businesses need to be well organised. This is relatively easy
with three or four staff. It is far harder with 300 or 400. For this reason, large organisations are
divided into functional areas, such as sales and finance. Employees can specialise in specific areas
whereas, in a small business, employees are likely to do a greater variety of tasks.
This information is useful for achieving your BTEC First and for your own future career. In
this unit, you will learn how business organisations operate and about the specialist areas
you may choose to work in one day.

Learning outcomes
After completing this unit, you should be able to achieve the following learning outcomes:
1. set business aims and objectives
2. understand the main functional areas in business organisations.

BTECs own resources

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you will be able to practise with the assessment activities in this book.
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How you will be assessed

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Many large organisations have a mission statement that

briefly identifies the main purpose of the business and how
it sees itself. Some businesses have a vision statement.
Others have both a mission statement and a vision
statement.
The wording may be different depending upon the
sector and its ownership.

Privately owned businesses focus on customers,

employees, the cost of their products or how they give value
for money. Tescos mission statement is: We create value
for customers to earn their lifetime loyalty.
Publicly owned organisations may mention the service
they provide, the work they do and include statements
about quality, efficiency and customer service. The
Department of Transports mission statement is: Working to
deliver a transport system which balances the needs of the
economy, the environment and society.
Not-for-profit and voluntary organisations focus on the
services they provide, the causes they support or their aims
in helping those in need. The mission of the British Red
Cross is described below:
The British Red Cross helps people in crisis,
whoever and wherever they are. We are part of a
global voluntary network, responding to conflicts,
natural disasters and individual emergencies. We
enable vulnerable people in the UK and abroad to
prepare for and withstand emergencies in their own
communities. And when the crisis is over, we help
them to recover and move on with their lives.

000000000000000000000000000000
Many mission statements are quite short. Others are
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longer. They include the aims and objectives of the business, in other words, what the business is
going to do and how it is going to achieve the mission.

1.2 Business aims

All businesses have aims they want to achieve. These are its long-term plans, probably over the
next 35 years. Businesses will probably want to focus on one or more of the following areas:
n
Profit and profit maximisation privately owned businesses aim to make a profit, as do those in
public ownership (see Unit 1, page 00). Most aim to increase profits every year. Some want to
achieve profit maximisation, which means making as much profit as possible.
a
Survival when trading is difficult, some businesses may make little or no profit, and focus on
ttrying to stay in business until times improve.
Break-even one method of surviving is to focus on breaking even over a certain period. This
means making enough money to cover the total costs involved in producing and selling the goods
or services, and running the business. Although there is no profit, no money is lost. You will learn
about break-even in Unit 3 (page 00).
a
Growth many businesses want to sell more every year and focus on expanding the business.
They may plan to open more branches, start trading abroad or buy out a competitor.

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Unit 2 Business organisations

Measurable achievement can be checked. Recording your progress and keeping a record of your
completed assessments will enable you to measure your achievements.
c
Achievable you can attain your target if you work hard. You can do really well if you stretch
y
yourself.
Realistic your target should be sensible so that you stand a chance of achieving it. For example,
iit would be unrealistic to aim to complete Unit 2 in a week.
Time-constrained every objective should include a date for achievement or review. This acts as
a warning, as well as a spur, if you are falling behind.
You either achieve a SMART objective or need a good reason for not doing so. This type of
objective is useful for learners in schools and colleges. It is also important for managers and
employees in business.

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1.4
Failing
to
meet
aims
and

objectives
It is not always possible to meet aims and objectives. Businesses will want to know why they have
failed and then take action to correct this as soon as possible.
A business may not meet its aims and objectives for several reasons. Many of them relate to the
type of external changes mentioned in Unit 1. Businesses often try to forecast these changes in
advance by doing a PEST analysis.
a
Political a change of laws or regulations may affect the business, such as the introduction of
drink driving laws or the smoking ban, which adversely affected the pub trade in Britain.
d
Economic the economy may go into recession, as it did in 2008/09. As a result, consumer
demand for the goods and services of many businesses fell dramatically.
d
Social peoples buying habits and lifestyles might change. The demand for carpets fell when
wooden floors became popular.
w
Technological the launch of a new, technologically superior product or service by a competitor
can have a serious effect.

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1.6 Aims and objectives in different

sectors
Aims and objectives vary between organisations in different
sectors. These businesses have different purposes.
s
Private sector businesses provide goods and/or services, and must make a profit to survive.
They can only break-even or make a loss for a very short time, or they will have to close.
T
Public sector businesses are owned by the state. Many provide essential services free of charge
or below cost price, such as the NHS. Remember that the government also owns businesses that
aim to be profitable, like the Royal Mail.
a
Voluntary sector organisations raise money that is used to support a particular cause. They aim
to make a surplus, after the costs of the business have been deducted, and reinvest this into the
business.

BTECs own resources

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