Changes in Aims and Objectives

This section explains Changes in Business Aims and Objectives. Business aims and objectives can change over time due to various internal and external factors. As businesses evolve, their priorities and strategies shift to adapt to market conditions, new technologies, legal changes, performance outcomes, and internal developments. Understanding how and why these changes occur is important for businesses to stay competitive and sustainable in dynamic environments.

Market Conditions and Technology

Market conditions: Changes in the market, such as economic trends, customer preferences, competition, or supply chain disruptions, often force businesses to revise their aims and objectives. For example, a recession may push a business to focus on cost-cutting or survival, while a boom might encourage it to expand.

Technology: Advances in technology can also lead businesses to adjust their objectives. This could involve adopting new technologies to improve production efficiency, launching digital products or services, or entering e-commerce markets.

Example: A traditional retail store might change its objectives to focus on building an online presence in response to the rise of e-commerce and changing shopping habits.

Why Business Aims and Objectives Change as Businesses Evolve

Changing business environment: As businesses grow or face external challenges, their aims and objectives need to evolve. Early-stage businesses may focus on survival, whereas more established businesses may prioritise expansion or increasing profitability.

Internal growth: As the business matures and grows, its objectives may shift from simply establishing itself to achieving market leadership, diversifying, or improving efficiency.

Example: A start-up business initially aims to break even and establish its brand. However, once the business gains a foothold in the market, the aims shift to increasing market share or developing new products.

In Response to New Technology

Impact of new technology: Businesses often change their aims to leverage new technologies that improve their operations, customer service, or product offerings. This could include automation, digitalisation, or adopting new software solutions.

Technology-driven objectives: As businesses embrace technology, they may aim to increase efficiency, reduce costs, or expand product offerings through tech-driven innovations (e.g., artificial intelligence, machine learning, or cloud computing).

Example: A manufacturing company might set an objective to integrate robotics into its production process to improve speed and reduce labour costs.

 In Response to Performance

Performance review: Businesses regularly assess their performance against their set objectives. If targets are not met, a business may need to adjust its aims to either set more realistic goals or introduce new strategies to improve performance.

Underperformance: If a business is underperforming (e.g., not reaching sales targets), its objectives may shift to focus on improving efficiency, reducing costs, or improving product quality to regain competitiveness.

Overachievement: Conversely, if a business exceeds its goals, it may set more ambitious objectives, such as expanding its market share or exploring new growth opportunities.

Example: A company might revise its objectives to focus on increasing customer satisfaction after noticing that sales have been affected by poor customer reviews.

In Response to Legislation

New laws or regulations: Changes in the legal environment often lead businesses to update their objectives. These might involve complying with new laws on health and safety, environmental standards, or employee rights.

Adapting to compliance: Legislation can impact a business’s operations, and objectives may shift to ensure compliance with legal requirements. This could mean changing production processes, adjusting working conditions, or implementing new reporting systems.

Example: A food manufacturer may need to update its objectives to meet new food safety regulations or labelling requirements imposed by the government.

In Response to Internal Reasons

Internal factors: A business’s internal environment, including its workforce, leadership, and organisational structure, can also influence changes in business aims and objectives.

Management changes: A change in leadership or management style might lead to a shift in direction. For example, new management might prioritise innovation and diversification, while previous management focused on cost-cutting.

Resource allocation: A business might change its objectives based on available resources, such as new capital, staff, or expertise. For example, if a business secures additional funding, it may set new growth-oriented objectives.

Employee skills and workforce capabilities: As the workforce evolves, so too do the company’s capabilities, which might prompt a shift in its goals, such as increasing the product range or entering new markets.

Example: A company may shift its objectives to focus on innovation and research if it hires a new team of highly skilled researchers and developers.

How Business Aims and Objectives Change as Businesses Evolve

From survival to growth: In the early stages, businesses often aim to survive and establish themselves in the market. Over time, as the business becomes more stable, the aims and objectives shift towards growth, expansion, and market leadership.

Maturity and diversification: Once a business is well-established, its objectives may focus on diversification (offering new products or entering new markets) or enhancing brand loyalty.

Focus on sustainability and long-term success: In mature stages, businesses often focus on maintaining market position, reducing environmental impact, or innovating for long-term sustainability.

Example: A local coffee shop might initially aim to survive in a competitive market but later shift its objectives to expanding into multiple locations or offering a wider variety of products.

Focusing on Survival or Growth

Survival: In tough market conditions or when facing financial difficulties, businesses may focus on survival, reducing costs, maintaining cash flow, and managing risk. This could mean reducing operations, cutting product lines, or making staff redundancies.

Growth: Conversely, businesses that are more stable or experiencing success may focus on growth, looking to increase market share, expand into new markets, or develop new products.

Example: A small business in an economic downturn might aim for survival by reducing its workforce or cutting non-essential expenses. However, once the economy improves, the business might refocus on growth and expansion.

Entering or Exiting Markets

Entering new markets: As businesses grow, they may seek to enter new geographical markets (domestic or international) or target new customer segments. This is often reflected in updated business aims and objectives to reflect expansion efforts.

Exiting markets: On the other hand, businesses may decide to exit certain markets if they are no longer profitable or aligned with the company’s strategic vision. Objectives may change to focus on consolidating resources in more profitable areas.

Example: A business may exit a declining market (e.g., physical video rental stores) to focus on a growing market (e.g., online streaming services).

Growing or Reducing the Workforce

Growing the workforce: Businesses may increase their workforce to support growth, improve productivity, or expand into new markets. This might involve recruiting new employees or training existing staff to take on new roles.

Reducing the workforce: In times of financial difficulty or organisational restructuring, businesses may reduce their workforce through redundancies or outsourcing.

Example: A tech company might hire additional software developers to scale up production of a new app, whereas a company facing financial struggles might lay off staff to reduce operating costs.

Increasing or Decreasing the Product Range

Increasing the product range: As businesses expand, they may diversify their product offerings to meet the changing needs of customers or to enter new markets. This could involve launching new product lines or services.

Decreasing the product range: If certain products are underperforming, a business might decide to reduce its product range, focusing on its most profitable or successful items.

Example: A clothing retailer might expand its product range to include accessories or footwear, while a company might drop low-selling product lines to focus on high-demand items.

Conclusion

Business aims and objectives are not static; they evolve over time in response to changes in market conditions, technology, performance, legislation, and internal factors. As businesses grow, their focus may shift from survival to growth, from product expansion to market entry, or from increasing the workforce to streamlining operations. By continuously adapting their aims and objectives, businesses can respond to challenges, seize new opportunities, and remain competitive in the marketplace.