In addition to monetary aims and objectives, a business may have other aims that are non-financial:
Remember for the exam:
Positive Reputation
Reputation is the general perception that customers have about a business. A business that has a good reputation is likely to be seen as high-quality and have good Customer service. Having a positive reputation means that customers are more likely to return (repeat business) and also promote the business to others via word-of-mouth promotion. Additionally, customers are willing to pay more when businesses have built a positive reputation.
Would you rather pay £10 for a bad haircut or £15 for a good one?
| £10 Barbers | £15 Barbers |
| ⭐️ 1 Star Review | ⭐️⭐️⭐️⭐️⭐️ 5 Star Review |
However, a business that has a poor reputation is likely to receive criticism and customers are not likely to recommend the business, or worse, share their bad experience or post negative reviews online., meaning that not only will that customer return, but prospective customers could be put off.
Market share is the per cent of sales a business has compared to all the competitors in the same industry (those offering the same Product or service).
For example, if an industry is worth £100m a year, and a company has sales revenue of £50m in the same year, their market share would be 50%.
It is easy for a business to increase market share in a growing market/ industry as it can capture new customers. However, if a market is not growing this means the business has to compete to take sales away from competitors, which could mean changing buying behaviour.
Increasing market share provides the following benefits:
- Economies of scale — when businesses get a discount for buying in bulk
- Influence over market prices — bigger companies are in a better position to set the prices for their products
- Reduce external risks
- Generate more sales and profits
- Gain new customers
- Enter new markets easier
Sustainability
Being ethical means doing the right thing and having moral principles and not acting out for personal gain.
Corporate responsibility is the idea that a business should show moral principles in its business operations.
Sustainability is the idea of getting raw materials from the earth so that it does not cause damage to our planet in the long term.
All businesses must follow the law, being ethical means going above and beyond the law and doing the right thing regarding business decisions, such as dealings with suppliers, customers and employees or other stakeholders.
Fairtrade is a movement that aims at giving producers of products better working conditions.
Reduce carbon footprint
Every person and business emits carbon into the atmosphere which contributes to global warming. By reducing the carbon footprint business are helping to slow down climate change. They can do this by using green energy and renewable fuels and recycling.
Did you know? A study completed 4 years ago found that just 100 companies are responsible for 71% of global emissions. Source.
Ethically sourced materials, contractors, or suppliers
Customers are increasingly becoming more and more aware of where their purchases come from and the impact it is having on the planet. By using ethically sourced materials and making sure that contractors and suppliers are doing the same, the business can be sure that its supply chain is green and not causing any undue harm to the planet, making customers more likely to make a purchase as they are also likely to feel better about purchasing a green product over one that is not ethically sourced. However, by not doing this it could discourage some customers from making a purchase who may go to competitors that offers products that are ethical, causing the business’s sales to decrease.
Reduce waste
Waste is not sustainable as it means that raw materials have been used that were never needed. Businesses may Aim to be sustainable by reducing their waste which can also have the added benefit of reducing costs.
Did you know? UK’s largest supermarkets throw away enough food for 190 million meals each year. Source. Perhaps the big supermarkets should make one of their aims to reduce waste! What would be the advantages of this? The business will save money through efficient use of raw materials, packaging and transport of the wasted goods and also lead to an improved reputation for the business.
Support local businesses
Big retail chains and supermarkets have led to the closure of many small local retailers. However, there have been an increasing number of businesses that provide services to make it easier to access and support local businesses. For example, delivery apps that deliver from local retailers or takeaways.
Support Equality And Diversity In the Workforce
It is important that businesses support equality and diversity to meet legislation (laws) and improve brand image.
The Equality Act 2010 protects people against discrimination because of age, disability, gender reassignment, marriage, pregnancy, race, religion, gender & sexual orientation. These are known as protected characteristics.
Supporting equality and diversity results in an improved brand image and improved customer/ employee satisfaction. This is because businesses that are inclusive will make their customer and employees feel welcome, valued and part of the community, resulting in increased purchases and better motivation from staff. Additionally, if a business is known for not being inclusive, it would discourage customer purchases or result in boycotts consequently resulting in a public relations disaster.
Having a diverse workforce gives the business the benefit of different perspectives and different life journeys which results in increased creativity and faster problem-solving.
Reduce Employee Turnover
Hiring new employees is expensive for businesses. They have to pay for job adverts, referencing, and training, not to mention the time costs of creating job descriptions and person specifications, interviewing and so on.
Employee turnover is the amount of staff that joins and leaves a business over a period of time.
By keeping employees happy, employee turnover will be reduced, meaning that employees will stay for longer, reducing costs overall and also meaning that they are more likely to be better motivated and work harder for the business.
Did you know? With a rate of 60% of staff leaving a year, retail businesses have the highest employee turnover.
When employees are satisfied with their job, they are going to be emotionally committed to their work. This means that employees care about their work and the business. Satisfied employees are likely to be more productive and efficient in working for the business as they get satisfaction from their work other than pay, for example, the good working conditions, job security and chance for progression/ promotion. This all leads to higher attendance rates resulting in the business saving money on not hiring new staff.
