Topic 3 - Objectives 03, 2015 · aims/objectives of the organisations and be able to explain any...
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Transcript of Topic 3 - Objectives 03, 2015 · aims/objectives of the organisations and be able to explain any...
Topic 3 - Objectives
Higher Business Management
1
Learning Intentions / Success Criteria
Learning
Intentions
Objectives of
businesses
Success Criteria
Learners should be aware of the following
aims/objectives of the organisations and be
able to explain any similarities or
differences in these aims/objectives.
• Corporate social responsibility
• Growth
• Satisficing
• Managerial objectives
2
Corporate Social Responsibility (CSR)
In order to have a positive public image and gain
customer trust, many businesses look to improve
the working conditions of their employees, their
treatment of the environment and working with
society.
3
Methods to Ensure Good CSR
4
Methods of good corporate social responsibility
can be carried out in the following areas:
• ethical and environmental responsibilities
• philanthropy
• economic responsibilities
• legal responsibilities.
Ethical and Environmental
Responsibilities
• Avoiding the use of child labour.
• Paying staff a living wage instead of minimum wage.
• Making sure raw materials come from sustainable sources (sources
that can be replaced), e.g. trees when paper is being manufactured.
• Trying to reduce its carbon footprint as much as possible, e.g. using
the most environmentally friendly method of distribution.
• Making sure suppliers are paid fairly for what they produce, e.g. by
adopting a fair trade policy.
• Recycling as much as possible / minimising packaging for
customers.
• Providing opportunities for employees to participate in physical
activity and promoting healthy eating, e.g. providing cycling
facilities to get to work or providing healthy options in the canteen.
5
Philanthropy
Donate to charity.
6
Economic Responsibilities
Use fair and competitive marketing.
7
Legal Responsibilities
Abide by laws that govern businesses.
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Advantages of Positive CSR
9
• The business gains a good reputation for its
caring nature.
• Customers who agree with the aim are likely to
use the business.
• The business can attract high-quality staff who
believe in the ethics of the business.
• Society and the environment are kept in good
order, which will benefit the business in the
long run.
Satisficing
• Satisficing means aiming for a
satisfactory or adequate result rather
than the best possible outcome,
especially during a recession.
• Most private sector businesses
would ideally aim to maximise
profits; however, through satisficing,
a business could aim only to make a
level of profit which is good enough
to satisfy the main stakeholders,
perhaps making enough profit to
cover satisfactory dividends to
stakeholders.
10
Managerial Objectives
• Managers may try to improve their status within the company, for
example, expansion into new markets, or developing new technologies.
• Managers might have their own internal objectives, either financial or
non-financial.
• They may aim to have many subordinates reporting to them in order to
increase the responsibility, and therefore their salary.
• They may also want to receive bonuses for achieving certain targets,
other fringe benefits (‘perks’) such as a company car or promotion.
11
Growth
Businesses might aim to grow for a number of reasons:
• To increase sales and profit which in turn will increase the return on
investment for owners (e.g. dividends for shareholders).
• To increase the number of customers which will increase profits and market
share, and may enable the organisation to become a marker leader.
• To take advantage of economies of scale (discounts for bulk buying),
thereby reducing costs.
• To reduce the risk of a takeover by another organisation.
• To gain a better reputation in the marketplace which will encourage new
customers to buy, thereby increasing sales and ultimately profit.
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Advantages/Disadvantages of Internal
Growth
Advantages
• Can be less risky than
taking over another
business
• Can be financed through
internal sources
• Can build on existing
strengths such as brands
and good customer
relations.
Disadvantages
• A slower method of
growth
• Limited by the size of
existing market.
13