Objective setting in the micro‐business

Abstract

Contends that micro‐business owner‐managers invariably have objectives, although they do not always make them explicit. These objectives tend to relate to personal rather than business criteria. In addition, the vast majority of micro‐business owner‐managers indicate little inclination to maximise profit or pursue growth. The supposed non‐existence and ambiguity of objectives amongst owner‐managers probably arise because they often subconsciously set objectives, rather than make them explicit as part of a written business plan. In practice, micro‐businesses generally pursue a number of economic and non‐economic objectives relating to factors such as income levels, job satisfaction, working hours, control and flexibility. These objectives were derived from the influence of the micro‐business owner‐manager’s individual, social and economic contexts. Moreover, the behaviour of owner‐managers is most appropriately characterised in terms of satisficing behaviour. The impact of this is very important, because it means that there is often no drive to improve the business in terms of growth, sales and profitability. Furthermore, the willingness of owner‐managers to alter their aspiration levels, if objectives were not being easily achieved, often means that they do not initiate changes in the way they run their business when perhaps they should.