1.3 Organizational Objective - Weebly1. To control a firm’s plan (set up targets within a...

Business objectives -

Mission and vision statement -

Objectives

Objective lead you to your goal

Questions you ask

Where are we now?1.Where do we want to be?2.How do we get there?3.How do we know we are there?4.

1.3 Organizational Objective Sunday, September 22, 20139:02 AM

IB Business And Management

Address the question "what do we want to become"-

focuses on the long run -

Do not have to be actual targets; it allows people to see what could be-

Vision statement

Deals with the question "what is our business"-

Focuses on the medium and long term -

Updated more frequently -

Outline or highlights the values of the business -

Sets the framework for the workers (managers, employers, employees)-

Mission statement

Mission Statements and Vision Statement Sunday, September 22, 20139:26 AM


Long term Aims

Growth Image and reputation Market standing

Strategic

Sale revenue Survival

Tactical

Ethical

Objectives

Aims and Objectives Sunday, September 22, 201310:17 AM


NOTE: DO TACTICAL, STRATEGIC AND ETHICAL OBJECTIVESMonday, September 30, 20139:35 AM


Acting morally towards their shareholders

Owner

Share holder

Government

Employees

Environment

Creditors or suppliers

Community

Customers

Stake holder-

Moral

Corporate social responsibility

CSR (Corporate social responsibility)

To assure that social responsibility are being implemented.Social Audit

To assure that social responsibility are being implemented towards the environment. Environmental audit

S - SPECIFIC/M- MEASURABLE A - ACHIVABLE (AGREEABLE)R - REALISTICT - TIME

ClothFood Phone

BatelcoZain Viva

Telecom

Industry Market Share

Market share of the company= total sales revenue / the whole industry /revenue * 100

Customer base Profits

Increases your image and reputation

Corporate Social Responsibility (CSR) Social Auditing Monday, September 30, 20139:38 AM


Business and Management:•

1.3 Organizational Objectives •

Lesson 1•

1. Focus Questions•

1. What are some important organizational objectives?

2. What is a mission statement?

3. What is a vision statement? Do they differ?

…

2. An overview•

Starts with a D_____? Anyone?○

Decision-making…right!○

What is the core role of management?•

Where are we now?1.

Where do we want to be? (we are going to focus on this)2.

How do we get there?3.

How do we know we are better?4.

…5.

There are four (4) key questions that management MUST ask in the decision-making process:•

3. Where do we want to be?•

The aims and objectives of business organization.○

This question answers this:•

Gives the business a sense of direction.○

A road map.

When you drive a car and get lost, what do you use to find your way?○

How do organizational objectives guide a business?•

To control a firm’s plan (set up targets within a department.1.

To motivate or inspire people to reach a common goal.2.

To direct; to provide an agreed and clear focus for everyone in the organization.3.

…4.

Organizational objectives have three (3) functions:•

4a. The importance of objectives•

Why is target setting vital in all businesses?•

Pages 41-44 •

Slide notes Wednesday, October 2, 20139:49 AM


If you do not do this you will have no clear sense of direction.○

No clear purpose.○

Why is target setting vital in all businesses?•

Give a business a sense of direction, purpose and unity.○

Forms the foundation for business decision-making.○

Encourages strategic thinking (planning for long term).○

Provides a basis for measuring and controlling the performance of the workforce, the management, and the entire business.

○

…○

Aims and objectives are set for many important reasons:•

4b. The importance of objectives•

Profit….show me the money Jerry!□

What are they interested in?

Stakeholder / shareholder groups○

Social responsibility of a business.□

…□

What are they concerned about?

Local community○

What are the many groups affected by the performance and activities of a business?•

5. Business objectives at different levels•

Goals, profit maximization, growth, over all survival.

Deal the with whole organization.○

Corporate objectives:•

Very specific objectives; departmental targets

Departmental objectives•

Targets set for you or by you.

Sales targets; if you are a salesperson.□

…□

Often used in performance appraisal

Individual objectives•

6a. Mission and Vision Statements•

Outlines a business’s aspirations (where it wants to be).○

“ I have a dream…”

“To be the leading sports brand in the world”

They relate to the attainment of success○

It is an image of an ideal situation in the future.○

A vision statement:•


…○

6b. Mission and Vision Statements•

Explains what the business is trying to achieve.○

Outlines the organizations values.○

It is a simple declaration that states the purpose of an organization’s existence.○

It will outline how a vision statement will be achieved.○

These statements do not have a time frame.○

They should be clearly defined and realistically achievable.○

As a manager you will need to ensure that decisions are consistent with the mission statement.

…

It will serve to unify all people and corporate culture in an attempt to achieve the organization’s vision.

○

A mission statement:•

6c. Mission and Vision Statements…still confused???•

Focused on long term.○

Not updated frequently.○

No actual targets. (what could be)○

Vision Statements•

Focused on medium to short term.○

Are updated frequently.○

Have actual targets. (what will be)○

Highlights the values of the business.○

…○

Mission Statements•



Lesson 2•


1. What are aims and objectives?

2. What is meant by short-term vs long-term objectives?

3. What ethical objectives do companies follow?

…

2. Aims and Objectives•

Aims:•

Pages 44 - 50 •


Are the long term goals of an organization. ○

They give a purpose to the direction of the company.○

Are often expressed in the mission statement.○

Aims:•

Are the short term goals of an organization.○

They are based on the company’s aims.○

They are quantifiable (measurable)○

Objectives:•

The main difference between the two is the time scale.○

Aims are vague, objectives are more specific.○

…○

Remember: •

3a. Short-term vs Long Term Objectives•

Long term aims of a business.

A plan or scheme to achieve what?○

It is used to achieve strategic objectives.○

What does strategy mean?•

The short-term ways that firms use to achieve their aims and objectives.○

What does tactics mean?•

3. How do we get to where we want to be?○

…○

Both strategy and tactics will answer the question…what question will it answer?•

3b. Short-term vs Long Term Objectives•

The day-to-day methods used to improve the efficiency of a business.

Operational strategies:○

Such as differentiation□

Those that affect the business as a whole

Generic strategies:○

Mergers, takeovers of rivals etc.

…

Aiming for market dominance – seek ways in doing so. □

Aimed at the long-term objectives of a business.

Corporate Strategies:○

What might be the several levels of strategy that a business can adopt?•

4. Tactical Objectives•

For example, a sales department will set its own objectives.

Are short-term objectives that affect a segment of the organization.○

So what are tactical/operational/secondary objectives?•


The main tactical objective for many businesses is survival.•

Maximize their sales.○

Remember: sales revenue is not PROFIT.○

…○

A second tactical objective might be sales revenue maximization.•

5. Strategic Objectives•

Targets for the next couple of years.

Are long-term aims of a business organization.○

Making as much profit as possible.

1. Profit maximization:○

Measured by an increase in sales or by market share

Economies of scale, lower average cost of production.□

Market power, more monopoly, charge higher prices.□

Reduced risks, diversification; helps reduce risk.□

Benefits of growth include:

2. Growth:○

Having a bad image may turn customers away.

Must also consider the NEEDS of the customer.

Having a good reputation, people will want to do business with you.

3. Image and Reputation○

4. Market standing○

Microsoft has high market standing for being number one in the computer software industry.

Walmart, the world’s largest retailer.

Toyota

The Body Shop. …

Refers to the extent which a firm has presence in the marketplace.○

What are strategic/primary objectives?•

6a. Ethical Objectives•

They are the moral principles that guide decision-making strategy.○

Morals are concerned with what is right and wrong, from a society’s point of view.○

What are ethical objectives?•

Reducing pollution○

Increase recycling○

Friendly waste disposal○

Treating employees well.○

Fairer trade conditions.○

Examples of ethical objectives:•

Pressure from within or outside the business to act ethically may occur.•

Some examples of Unethical business behavior:•


Financial dishonesty○

Environmental neglect○

Exploitation of workers○

Exploitation of suppliers○

Exploitation of customers …○

6b. How to Achieve Ethical Objectives•

Well, a number of businesses have to adopt an ethical code of practice.○

Documented beliefs and philosophies□

Guidelines and expectations on employee behavior.□

What is this ethical code of practice?

This should be published in the mission statement or annual report.○

Let’s look at box 1.3a on pg. 49.○

How can we achieve this?•

6c. Advantages / Limitations•

Advantages:•

Improved corporate image.•

Increased customer loyalty.•

Cost cutting.•

Improved staff motivation.•

Improved staff morale.•

Providing accurate information and labeling.•

Active community work.•

Having consideration for the environment.•

Adhering to fair employment practices.•

Limitations:•

Compliance costs.•

Lower profits.•

Stakeholder conflicts.•

Ethical behavior is very subjective.○

Depends on the individual.

What is right or wrong?○

Anti-discrimination laws.

Health and Safety at Work Laws.

Laws have been put in place to correct this.○

Note:•

Lets look at 1.3.3 pg 51•




Lesson 3•


1. What does it mean to have corporate social responsibility?•

2. What are social and environmental audits and how are they conducted?•

…•

2. Corporate Social Responsibility (CSR)•

Firms that act morally towards stakeholders, employees, and local community.○

Post-tax profits to charity.

Help clean up the environment.

So how can firms be socially responsible?○

So what are socially responsible firms?•

To obtain a competitive advantage.

…

Why is this important?○

One benefit of practicing CSR is increased reputation.•

3a. Differing Views about CSR•

Is the role of business solely to generate profits for their owners?○

Is this always the case?□

What has happened recently?...□

This views reasoning is that by pursuing the profit motive, firms will be more efficient and prosperous, thus helping society indirectly (job creation and corporate taxes).

Should governments, rather than businesses be responsible for sorting out social problems?○

Free Market or Non-compliance:•

3b. Differing Views about CSR•

Do businesses really help society?□

Do they try to improve society?□

Charities

Local community projects…

Which companies do what they can to improve the society, regardless of whether their actions help to increase their profits?

□

Refers to acting in a humanitarian and unselfish manner.

What is altruism?○

Altruistic CSR Attitude:•

3c. Differing Views about CSR•

Argues that businesses should be socially responsible ONLY if such actions help the business to become more profitable (used as a method of long term growth).

What does this view entail?○

Strategic CSR Attitude:•

Pages 44 - 50 •


business to become more profitable (used as a method of long term growth).

So, how can we monitor companies to practice CSR? •

How can practice this in other countries? •

In some Asian countries cigarette and liquor commercials are everywhere, where as in North America they are banned.

What is considered acceptable in one country may be totally undesirable in others.○

Is it possible?•

Box 1.3b gives examples of other means.□

Promote and encourage CSR in the workplace.

How so?○

Do managers have a role in CSR? •

To what extent is a firm able to act socially responsible? (7 factors J )…•

4a. Social Auditing•

To enhance their corporate image and reputation.

Why do corporations get involved in CSR?○

Let’s recap:•

Social audit: is an independent assessment of how a firm’s actions affect society.

Is a way to ensure that SR objectives are being implemented.○

So…what is Social Auditing?•

Environmental impact (pollution and waste levels)○

Staff management (health and safety)○

The audit will review a firms:•

See page 53. …□

What are 5 key parts of social auditing for a firm to devise policies that deal with its impact on society?

an independent review of a firms impact on the environment.○

What is an environmental audit?•

4b. Social Auditing…the limitations•

Auditor charge a fee○

Contents of the review may not be positive; could affect the public image and reputation of the company.

○

…○

What are the limitations of Social Auditing?•

5. Organizational Objectives and Business Strategy•

The performance of a business can be judged by the extent to which it achieves its objectives.

○

“Successful businesses have a clear vision of their aspirations and a mission that outlines their ultimate purpose.”

•

Peter Drucker? Have you ever heard of this guy?•

Stated that organizational objectives be SMARTJ•


Read pg. 56-57 to find out more. :P○

What does it mean to set SMART objectives?•

Specific○

Measurable○

Agreed○

Realistic○

Time constrained○

…○

Need to be:•


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