Syllabus: AQA - AS and A Level Business
Module: 3.1 What is Business?
Lesson: 3.1.1 Understanding the Nature and Purpose of Business

Introduction

This article supports educators working with the AQA AS and A Level Business specification (for example code 7131/7138) and focuses specifically on topic 3.1.1: Understanding the Nature and Purpose of Business. According to the specification, learners should grasp why businesses exist, how mission and objectives link, and the measurement and importance of profit. AQA+2Save My Exams+2

For school leaders, careers leads and subject staff this topic offers a foundational entry point to explore how business intent, strategy and performance inter-relate. It also provides a strong connection to real-world enterprise, helping students see how business decisions are shaped by objectives, mission and market context.

This article outlines the key concepts, shows how they link to contemporary business practice, indicates how they are assessed and suggests teaching and enterprise-skills integration strategies.

Key Concepts

• Why businesses exist: Businesses exist to provide goods or services that meet customer needs or wants, to create employment, generate wealth and add value. Save My Exams+1

• Mission, aims and objectives: A mission statement sets out the fundamental purpose of a business (who it serves, what value it offers). Objectives are measurable targets that support the mission. Save My Exams+1

• Business objectives: Typical objectives include profit, growth, survival, cash flow, social or ethical aims. AQA+1

• Measurement of profit: Learners should understand the basic calculations: revenue (also called sales or turnover) minus total costs (fixed plus variable) equals profit (or loss). AQA+1

• Adding value and the transformation process: Businesses convert inputs (raw materials, labour, capital, enterprise) into outputs (goods/services) and in doing so aim to add value. Save My Exams+1

• Inter-relationships: The mission influences objectives which inform operations; the measurement of profit and costs feeds back into objective-setting and strategic decisions. Studocu

Real-World Relevance

Consider the case of a UK independent craft brewery. The mission might be “to produce small-batch artisan ales that showcase local ingredients and sustainable brewing methods”. From this mission the brewery sets objectives such as achieving 10 % growth in volume each year, maintaining a net profit margin of 12 %, and sourcing 80 % of ingredients from within 50 km.

In practice this business must convert its inputs (brewed water, malted barley, hops, labour, equipment) into outputs (packaged beer) and add value by branding, packaging, and local provenance. It monitors revenue, fixed costs (brewery premises, equipment depreciation) and variable costs (hops, packaging materials, labour per batch).

Another example: A social enterprise café in London may prioritise a mission of “employing locally-disadvantaged young people to build barista skills”. Their objectives may include survival in the first year, achieving positive cash flow after six months, and donating 5 % of profits to a local charity. Profit still matters, but the purpose and objectives reflect a broader social mission.

These real-world scenarios help students understand that theories of mission, objectives and profit are not abstract—they shape real business decisions. They also help to illustrate tensions (e.g., between growth and sustainability, profit and social aims) which enrich classroom discussion.

How It’s Assessed

Under the AQA specification the topic 3.1.1 appears in Focus 3.1 “What is Business?” for both AS and A Level. For example AS content covers sections 3.1.1 to 3.1.4. AQA+1

In exam terms students will face case-study based questions where they must apply knowledge of objectives, mission, profit measurement and the transformation process. Typical question types include:

• Short answer (knowledge recall) – e.g., define mission statement, define variable cost, calculate profit given revenue and cost figures.

• Medium length (application/analysis) – e.g., explain why a business might set growth rather than profit as its objective.

• Longer questions (8-12 marks) where students must evaluate how objectives support business success or assess the significance of profit measurement for a business. For example, a 9-mark question might ask: “Analyse how managing costs might help a business achieve its survival objective.” Studocu+1

• Command words to emphasise: define, explain, analyse, evaluate. Teachers should guide students in linking theory to context, using case-specific data, considering alternative objectives and critiquing outcomes. In marking, students should show understanding (AO1), application (AO2) and evaluation (AO3/AO4 where relevant).

Enterprise Skills Integration

This topic offers rich opportunities to embed enterprise skills within the classroom:

• Problem-solving: Present students with a business scenario (e.g., a start-up with limited capital) and ask them to identify and justify suitable objectives, calculate costs and revenue, and propose a mission.

• Decision-making: Give learners data on revenue, fixed and variable costs and ask them to decide whether the business should focus on survival, growth or social objectives. They must justify the decision in the context of mission and market.

• Financial literacy: Teaching profit calculations, cost breakdowns and monitoring objectives helps develop students’ numeracy and real-world financial understanding.

• Communication: Students could create a mock mission statement and set SMART objectives for a fictional organisation, explaining how the mission links to objectives and operations.

• Reflection and evaluation: Encourage students to review how objectives may change over time (for example, a business evolves from survival to growth) and reflect on what this means for strategy.

Careers Links

Understanding the purpose and nature of business links directly to careers and the Gatsby Benchmarks for careers education. For instance:

• Roles in business strategy, operations, finance and management become more meaningful when students understand mission, objectives and profit measurement.

• Students may explore careers such as business analyst, management consultant, financial manager, entrepreneur or social enterprise leader – all of which engage with the topics covered.

• For careers leads, this topic offers a way to link curriculum to employer and enterprise interactions: invite guest speakers from local SMEs to discuss how they set objectives and measure success, or arrange work-experience opportunities where students shadow roles that engage with mission/Objectives/profit.

• Linking to industries: for example, young people interested in start-ups can explore how mission and objectives shape business launches; those intrigued by social enterprise can explore how purpose-led objectives differ from profit-only businesses.

Teaching Notes

Tips for teachers and SLT

• Begin with familiar real-life organisations (high-street retailers, cafés, start-ups) and ask students to identify their mission statements and objectives. This anchors abstract concepts in familiar contexts.

• Use clear worked examples of profit calculation (simple revenue minus fixed and variable costs) and ensure students practise with varied numbers (including losses).

• Create class discussion around the tension between different objectives (for example profit vs social, growth vs survival) to deepen analysis skills.

• Use mini-case studies in class where students set objectives for a fictional business and then monitor progress mid-term. This helps link mission, objectives and measurement.

• Regular use of retrieval practice: quick quizzes on definitions (mission, objective, fixed cost, variable cost) support strong memory performance.

• Use peer-teaching: students prepare presentations on a specific objective type (profit, growth, cash flow, ethical) and present real business examples (e.g., the craft brewery example above).

• Common pitfalls to avoid:

  • Students confuse mission statements with objectives: emphasise mission is overarching, objectives are measurable steps.

  • Calculation questions: ensure students understand difference between variable and fixed costs and can apply formulas correctly.

  • Application lacking context: students sometimes define objectives but fail to apply them to the scenario. Encourage use of specific business context.

  • Limited evaluation: when marking longer questions students often stop at application; ensure they add evaluation (for example consequences, competing objectives, changing environment).
    Extension activities

• Ask students to analyse the mission and objectives of a major company (for example a multinational) and critique how well they align.

• Create a simulation: students take the role of entrepreneurs launching a social enterprise; they must set mission, objectives, estimate revenue and costs, present to class.

• Link to cross-curricular numeracy: integrate cost and revenue graphs, break-even thresholds, value-added calculations.

• Use technology: interactive quizzes (for example via Seneca or Tutor2u) on 3.1.1 to support independent revision. Tutor2u+1