Why and How Aims and Objectives Change
Why Business Aims and Objectives Do Not Stay the Same
A business rarely pursues the same goals throughout its entire life. When a company starts out, survival is usually its primary aim. As it grows, the focus shifts to profit, then perhaps to market leadership or international expansion. These changes happen because the world around the business — and the business itself — keeps evolving. Understanding why business aims and business objectives change is essential for evaluating any strategic decision a business makes.
Business aims and objectives change in response to five triggers: market conditions, technology, performance, legislation and internal reasons. A change in any one of these can force a business to completely rewrite its goals.
Trigger 1 — Market Conditions
Market conditions change constantly. A recession reduces consumer spending, forcing a business focused on growth to switch its priority to survival. A new competitor entering the market can force a business to cut prices or invest in customer loyalty rather than expansion. Conversely, a boom in demand might prompt a business to move its objective from “stay profitable” to “increase market share by 15% in three years.” During the growth of food delivery platforms in the late 2010s, many traditional restaurant chains had to rethink their distribution objectives entirely to remain competitive.
Trigger 2 — Technology
Technological change can make existing products obsolete and open up entirely new markets. A business manufacturing printed street maps had to completely rewrite its objectives when smartphones and GPS navigation arrived. Digital disruption has forced retail chains to shift from “open 50 new stores” to “grow online sales by 40%” as consumer shopping habits changed. Technology also reduces barriers to international trade, encouraging businesses to set global expansion objectives they would not have considered feasible a decade earlier.
Trigger 3 — Performance
A business that is performing below expectations must adjust its objectives to reflect reality. If a retailer targets 20% revenue growth but only achieves 4%, it may reset its objective to “restore profitability” or “reduce costs by £500,000” rather than pursue further growth. Equally, a business that outperforms its targets will raise its ambition — perhaps moving from a regional to a national objective. Financial data, customer feedback and operational KPIs all inform these performance reviews.
New laws can force a business to abandon an objective or redirect resources. The introduction of the National Living Wage increased labour costs for retailers and hospitality firms, pushing many to shift objectives from workforce expansion to automation investment. Data protection regulations required businesses to set new objectives around compliance and data security. Environmental legislation, such as requirements to reduce plastic packaging, has led businesses to add sustainability targets to their list of formal objectives. Failing to adapt objectives to legal changes can result in fines, reputational damage or forced closure.
Changes inside the business can also reshape objectives. A new chief executive may have a different vision for the company, shifting the focus from profit to growth or from domestic to global markets. A period of rapid growth can create internal pressures — the business may need to set new objectives around improving communication, restructuring management or developing its workforce. A merger or takeover changes the size, culture and capabilities of the business, requiring objectives to be rebuilt from the ground up. Even something as specific as a key member of staff leaving can force a business to rewrite its short-term operational objectives.
How Aims and Objectives Change
The spec identifies four practical ways in which aims and objectives change. First, a business may shift its focus between survival and growth depending on economic conditions. Second, it may change which markets it operates in — entering a new geographic market or deliberately exiting one where it is losing money. Third, it may change the size of its workforce, growing headcount during expansion or reducing it through redundancy during a downturn. Fourth, it may change its product range — launching new products to exploit market opportunities or withdrawing underperforming products to reduce complexity and cost.
Entering a new market is an objective a business sets when growth conditions are right. Exiting a market can also be a deliberate strategic objective — withdrawing from an unprofitable or competitive market frees resources for more profitable areas.