Transcript 1.3_Organizational_Objectives_1

Organizational
Objectives
The Importance of objectives
Give businesses a sense of direction,
purpose and unity
Form the foundation of business decision
making
Help to encourage strategic thinking
Provide the basis for measuring and
controlling the performance of the
workforce
Vision statements
A vision statement outlines a business’s
aspiration in the distant future
“To be a leading sports brand in the
world” is the vision of Adidas
Vision statements relate to attainment of
success
Mission statements
A mission statement tends to be a simple
declaration that broadly states the
underlying purpose of an organization.
“To be a world class institution in nurturing
the holistic development of our students”
Clearly defined and realistically achievable
Serve to unify all people and corporate
cultures within the workforce
Vision & Mission statements
Vision statements focus on long term whereas
mission statements can focus on the medium
or long term
Mission statements are updated more
frequently than vision statements
Vision statements do not have actual targets
The mission statement tends to highlight the
values of the business
Aims
Aims are the general long term goals of
an organization.
Broadly expressed and unquantifiable
statements
Example, ‘to promote social and
environmental integrity’
Long term aims are usually set by
senior directors of a business
Objectives
Objectives are short term and more
specific goals of an organization, based
on aims.
For example, for a school ‘to achieve
100% pass are IB examination’
Setting objectives may be delegated to
senior or middle management
Short Term vs Long Term
Objectives
Strategy is any plan or scheme to achieve
long term aims of business.
Strategy is used for strategic objectives.
Tactics are short-term ways that firms can
use to achieve their aims and objectives
Short Term vs Long Term
Objectives
Strategy is any plan or scheme to achieve
long term aims of business.
Strategy is used for strategic objectives.
Tactics are short-term ways that firms can
use to achieve their aims and objectives
Levels of Strategy
Operational strategies are the day-to-day
methods to improve efficiency of an
organization
Generic strategies are those that affect
the business as a whole
Corporate strategies are aimed at the
strategic objectives (long-term) of an
organization.
Tactical Objectives
Tactical objectives (operational) are
short-term objectives that affect a
segment of an organization, such a
department
Short-term objectives tend to refer to
targets set for the next 6-12 months
Example, a tactical objective could to
maximize sales revenue
Strategic Objectives
Strategic objectives or primary objectives refer
to long term aims of business organization
Examples in next slide
Types of Objectives
Profit maximise. Some business try to profit
maximise.
Growth. Many businesses pursue growth for
survival.
Increasing shareholder value. Public listed
company run the company to increase share
price and dividends.
Image and reputation
Market standing is interlinked with corporate
image and reputation of a business.
Sales revenue maximization.
The CSR Vineyard
You are an analyst with a private equity
firm.
For the first time, your firm is thinking of
investing in a business with ethical
objectives.
Watch the video to know the company
better.
Advise your manager whether to invest in
this company.
The CSR Vineyard
Ethical Objectives
Ethics are moral principles that guide decisionmaking and strategy.
Morals are concerned with what is considered
right or wrong from society point of view
Ethical objectives may include:
- Reducing pollution by using environmental
friendly production methods
- recycling of waste materials
- disposal of waste in an environmental friendly
way
- Offer staff sufficient rest breaks during their
work shift
Ethical Objectives
Examples of unethical business behaviour
- Financial dishonesty
- Environmental neglect
- Exploitation of the workforce
- Exploitation of suppliers.
- Exploitation of consumers.
Ethical Objectives
Advantages of ethical behaviour
Improved corporate image.
Increased customer loyalty
Improved staff motivation
Improved staff moral
Ways to social responsibility
Providing accurate information and
labelling
Active community work
Having consideration for the environment.
Adhering to fair employment practices.
Limitations of ethical behaviour
Compliance costs. For example, organic
products are more expensive.
Lower profits.
Stakeholder conflict.
Corporate Social Responsibility
Socially responsible firms are businesses that
act morally towards their stakeholders.
Free market CSR attitude. Many economists
argue that the role of businesses is to
generate profits
Altruistic CSR attitude. These businesses do
what they can to improve the society
Strategic CSR. Business adopt CSR if such
actions help them grow.
Social Auditing
Socially responsible firms are businesses that
act morally towards their stakeholders.
Free market CSR attitude. Many economists
argue that the role of businesses is to
generate profits
Altruistic CSR attitude. These businesses do
what they can to improve the society
Strategic CSR. Business adopt CSR if such
actions help them grow.
Changes in Corporate Objectives
& Strategy (HL)
Internal factors:
Corporate culture – norms and customs of a
business and its workforce
Type and size of organization
Age of business – any new business will place
break-even and survival as their key objectives
Finance
Risk profile of key stakeholders
Private vs Public organizations
Changes in Corporate Objectives
& Strategy (HL)
External factors:
State of economy – boom or slump
Government constraints – rules and
regulations
Pressure groups – may force business to
change through lobbying
Changes in Societal Expectation
of Business Behaviour
Attitudes towards CSR changes over time.
CSR is a subjective issue – what is right or
wrong largely based on public opinion
Pressure groups affect organisational
behaviour.
Businesses become more aware of
environmental damage